By Cameron Chai
Semiconductor Manufacturing International (SMIC), a China-based semiconductor development facility, recently declared signing a definitive investment agreement with China Investment Corporation (CIC).
According to the agreement, SMIC will receive a US$250 million investment from CIC, which in return will acquire 360,589,053 convertible preferred shares at HK$5.39/share.
This acquisition and conversion of shares will enable CIC to hold around 11.6% of SMIC share capital. The deal will also offer CIC an option to invest a further US$50 million in SMIC while adhering to the same pre-conditions. CIC will also be at liberty to nominate one member to the SMIC board of directors.
According to Dr. Jiang Shangzhou, chairman of SMIC, the agreement will deliver his organization a capital source to allow SMIC to take forward projects yet in the planning stages. The collaboration will also allow SMIC to develop new nanotechnologies and semiconductor systems.
The collaboration between the two organizations depends on approval from both regulatory boards and shareholders, and other customary conditions.