Tsinghua Unigroup is looking to raise cash by selling a stake in Unisoc

16 Feb, 2021 04:33
source: Singularity Financial

Singularity Financial Hong Kong February 16, 2020 – The state-backed conglomerate, Tsinghua  Unigroup denies it is insolvent despite defaulting on three bond payment deadlines and missing three interest payments. And the chipmaker is looking to sell part of its stake in its Unisoc unit to raise cash, a move which could also help revive plans for an initial public offering of the key mobile chip affiliate, four people familiar with the development told local media.

Unisoc was formed in 2014 by merging RDA Microelectronics and Spreadtrum Communications – both wireless IC specialists. It is China’s second largest designer of mobile chips after HiSilicon.

Last year, in a re-structuring exercise bringing in new investors, Unisoc was valued at $8.5 billion. That re-structuring saw Unigroup’s share in Unisoc reduced from 57% to 38.5%. Other investors in Unisoc are The China National IC Industry Investment Fund with 15.27%, the Shanghai IC Industry Investment Fund with 4.09% and Intel with 12.98%.

Last year, Unisoc is reported to have planned an IPO on the Shanghai Star market but it didn’t materialise.

The crisis has raised questions about Unigroup’s long-term stability and how much backing the conglomerate, which is 51% owned by Tsinghua University, will continue to be given by Beijing. The central government, keen to develop a weak domestic chip industry, has invested billions of dollars in Unigroup projects as well as in other chipmakers such as SMIC.

Recently two of Unigroup’s chip projects – a NAND fab in Chengdu and a DRAM fab in Chongqing were shelved due to lack of funds.