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Manufacturing Integration Technology to sell semicon business

Singapore

MANUFACTURING Integration Technology is looking to dispose of its semiconductor business for an estimated price of S$84.5 million and focus its energies on contract equipment manufacturing and customised automation as its core business.

It announced on Wednesday in a Singapore Exchange filing that it had entered into a share purchase agreement with Ningbo MIT Semiconductor Company for its entire shareholding interest in its wholly-owned unit, MIT Semiconductor. The purchaser is a nominee vehicle of CFTC, a China-based private equity fund management company founded by Semiconductor Manufacturing International Corporation.

Various assets and two other wholly-owned subsidiaries, Generic Power and i.PAC Manufacturing, will be transferred to MIT Semiconductor as a condition for this proposed disposal. The three units design and manufacture automated equipment for the semiconductor industry.

The company said that the proposed disposal will allow it to unlock value that had been accumulated for the benefit of shareholders, and it intends to distribute the net proceeds by way of a special dividend or capital reduction. The proposed disposal offers an important avenue for the semiconductor business to develop a second pillar in the Chinese market, the announcement said.

Executive director Lim Chin Tong told The Business Times in a phone interview that "it is business as usual, except the ownership has changed" for the semiconductor business.

The semiconductor business will continue to grow in Singapore, but with this transaction, MIT Semiconductor will gain "a partner to access the Chinese market".

The company expects to make a first distribution of 24 cents per share based on the first payment received by the company upon deal completion as soon as practicable. This sale will be satisfied in cash, and the disposal will require the approval of shareholders at an extraordinary general meeting to be convened.

Kwong Kim Mone, chairman and managing director of Manufacturing Integration Technology, and his management team may also acquire or subscribe up to 10 per cent of the equity interest in Ningbo MIT Semiconductor Company after the sale is completed.

There will also be continuity in management of the semiconductor business, said Mr Lim.

Manufacturing Integration Technology closed 0.5 Singapore cents higher at S$0.33 on Wednesday before the announcement was made.