TCL Technology (000100) announced on the evening of March 30 that it plans to buy the remaining 45% stake in its subsidiary Guangzhou Huaxing Semiconductor from three shareholders - Hengjian Investment, Chengfa Investment, and Science City Investment.
The total price for this 45% stake is RMB 9.325 billion. TCL will pay roughly half in cash and half by issuing new shares. The deal is not considered a major asset restructuring.
According to the valuation report, the entire Guangzhou Huaxing Semiconductor is valued at RMB 20.722 billion, which is only a 6.68% premium over its book value.
To help fund the purchase, TCL will also raise up to RMB 4.662 billion by issuing shares to no more than 35 specific investors at RMB 4.16 per share. For reference, the stock closed at RMB 4.36 on March 30.
TCL said the move is aimed at gaining full control of Guangzhou Huaxing Semiconductor. After the deal, the company will own 100% of it, both directly and indirectly.
Management believes this will allow them to better support the subsidiary's operations, improve decision-making efficiency, and further strengthen TCL's position in the semiconductor display industry. The company's core businesses - semiconductor display, solar photovoltaics, and semiconductor materials - will remain unchanged.
