National Silicon Industry Group Co.,Ltd. (ASX: 688126) has announced a significant capital increase plan for its subsidiary, Shanghai Xinsheng Semiconductor Technology Co., Ltd.
The company intends to subscribe to a RMB 12.38 billion increase in Shanghai Xinsheng's registered capital by contributing its equity stakes in three affiliated companies. These stakes are valued at a total of approximately RMB 74.48 billion.
Concurrently, the company's major shareholder, Shanghai Guosheng (Group) Co., Ltd., plans to invest RMB 4 billion to subscribe to a RMB 665 million increase in the subsidiary's registered capital.
Upon completion of these transactions, Shanghai Xinsheng's registered capital will rise from RMB 23.8 billion to approximately RMB 42.83 billion.
Following the capital injection, National Silicon Industry Group's ownership stake in Shanghai Xinsheng will decrease from 100% to 84.4759%, though it will remain the controlling shareholder.
Rationale for the Capital Increase
The company's portion of the investment is aimed at enhancing the management integration of its 300mm semiconductor wafer business, optimizing resource allocation, improving operational synergies, and boosting overall management efficiency.
The funds from shareholder Guosheng Group are designated specifically for upgrading the production capacity of 300mm silicon wafers used in integrated circuits.
This strategic move aligns with the company's business development goals and is expected to accelerate the expansion of its 300mm wafer production capabilities and technological advancement.
The initiative is intended to strengthen the company's market position and solidify its leading domestic standing in the industry.
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