Chinese Tsinghua Unigroup May Sell Entire Stake as Early as This Year-End

Alibaba and 6 Other Strategic Investors Apply... Acquisition Amount Estimated at 50-60 Billion Yuan
Expected to Be Organized as a Bulk Sale Rather Than a Divisional Sale

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Tsinghua Unigroup, which is undergoing restructuring procedures, is expected to be sold as a whole. It is reported that a total of seven state-owned and private enterprises, including Guangdong Hengjian, Beijing Electronics Holdings, and Alibaba Group, have entered the bidding for Tsinghua Unigroup.

Tsinghua Unigroup announced on the night of the 18th that the first creditors' meeting was held under the supervision of the Beijing No. 1 Intermediate People's Court.

[Image source=Reuters Yonhap News]

Tsinghua Unigroup disclosed that seven state-owned and private companies have applied to participate as strategic investors and explained that the principle is to acquire the entire group as a whole, rather than selling off some prime assets separately.

Tsinghua Unigroup had previously announced the recruitment of strategic investors in July, immediately after the commencement of bankruptcy restructuring procedures. The company emphasized, "The successful holding of the first creditors' meeting means that the restructuring has entered the final and most important stage," and added, "By promptly confirming strategic investors, we will lay the foundation for the group's revival."

The institutions that applied as strategic investors were not disclosed through this announcement.

In this regard, the economic media Caixin cited a creditor group official, reporting that six state-owned enterprises from various parts of China, including Guangdong Hengjian, Beijing Electronics Holdings, and Wuxi Industrial Development Group, along with Alibaba, a total of seven entities, have applied as strategic investors.

The institutions applying to participate as strategic investors are reportedly considering acquiring Tsinghua Unigroup at around 50 billion to 60 billion yuan (approximately 9.2 trillion to 11 trillion Korean won).

China's Enterprise Bankruptcy Law stipulates that the administrator appointed by the court must prepare a restructuring plan within six months from the start date of the bankruptcy restructuring and submit it to the court and creditors. The deadline can be extended by up to three months if there is a legitimate reason.

Accordingly, it is expected that the strategic investor for Tsinghua Unigroup will be decided as early as the end of this year or at the latest in the first quarter of next year.

Tsinghua Unigroup is a semiconductor design and manufacturing company in which Tsinghua University holds a 51% stake. Along with the foundry (semiconductor contract manufacturing) company SMIC (Zhongxin Guoji), it is a representative semiconductor company in China. As of the end of June last year, Tsinghua Unigroup's total debt amounted to 156.7 billion yuan (29 trillion Korean won), more than half of which is short-term debt maturing within one year.