KUALA LUMPUR: The SilTerra Malaysia Sdn Bhd saga takes a new twist after Khazanah Nasional Bhd makes some changes to the terms and conditions of the takeover tender.
Khazanah was mulling over retaining up to a 30 per cent stake in the world-class but loss-making semiconductor firm after extending the tender to October 9 from July 31 originally, according to documents seen by the New Straits Times.
The extension provided bidders with options including alternative binding offer.
The alternative binding offer entails consideration over the selection of majority foreign participation or majority Malaysian participation for SilTerra.
"Khazanah will retain a minority interest of either 20 per cent or 30 per cent in SilTerra in the event a majority foreign participation is selected," a source said.
The sovereign wealth fund may keep a minority stake of between 20 per cent and 30 per cent in SilTerra if it chose a majority Malaysian participation.
To facilitate the alternative binding offer, the equity condition in SilTerra's manufacturing licence is removed.
The licence states that at least 55 per cent of the semiconductor foundry's shares should be held by Malaysians and this includes 30 per cent "specially reserved".
Silterra also should negotiate with International Trade and Industry Ministry (Miti) before distributing the allotted shares.
The removal of the equity condition is subjected to final approvals of Miti and the Malaysian Investment Development Authority.
In addition to the alternative binding offer, bidders can revise their submitted bid, under updated binding offer, on the basis that there are no changes to the equity condition stated in SilTerra's manufacturing licence.
In such updated binding offer scenario, Khazanah will not retain any equity shareholding in SilTerra.
The NST previously reported that Khazanah had received four bids for SilTerra including from Taiwan's Foxconn and Germany's X-FAB Silicon Foundries before the earlier deadline for submission on July 31.
The other two were Dagang Nexchange Bhd (DNeX) and Green Packet Bhd.
Industry observers have said Foxconn could be the preferred bidder for Khazanah due to its cash payment of about US$150 million.
Green Packet, in a 55:45 consortium with Dongfang Huijia Zhuhai Asset Management Co Ltd, had put in a bid comprising RM235 million cash payment and RM210 million debt absorption.
The proposal from DNeX and its strategic partner Beijing CGP Investment Co Ltd (Beijing CGP) was focused on planning and executing SilTerra's turnaround with a total investment of RM846 million, according to a source.
On top of a RM136 million cash payment for Khazanah, DNex and its partner will absorb SilTerra's RM210 million bank borrowings, and inject a total of RM500 million for its capital and operating expenditures.
Khazanah was not available for comment when contacted by last week.
Meanwhile, sources said the condition of Silterra's present manufacturing licence would not be reviewed if SilTerra remains in the local hands.
"SilTerra under DNex will be in capable Bumiputera hands with a Chinese giant as partner. If Green Packet is picked, SilTerra will still be in local hands but its founder (Puan Chan Cheong) will be second time lucky with Khazanah," they said, referring to Green Packet's disposal of its 57 per cent stake in Packet One Networks (M) Sdn Bhd to Khazanah's subsidiary Telekom Malaysia Bhd in 2014," they said.