KUALA LUMPUR: Khazanah Nasional Bhd will sell its entire stake in SilTerra Malaysia Sdn Bhd to Dagang Nexchange Bhd (DNeX) and consortium partner Beijing CGP Investment Co Ltd.
This ensures that the loss-making but world-class chip foundry remain in Malaysian hands, amid reportedly Khazanah's initial plans to cut its losses and sell it to foreign parties.
It is not known how much the consortium is paying to Khazanah for the 100 per cent SilTerra stake, pending a firm agreement signed between the two parties.
In an exchange filing yesterday, DNeX said Khazanah had on February 5 informed the acceptance of the company's takeover bid, subject to the signing of a definitive agreement.
"Acceptance of the bid is still subject to strict confidentiality with Khazanah and no further details of the bid can be publicly disclosed until the signing of the definitive agreement," said DNeX in its short announcement.
Khazanah confirmed that it had agreed to sell Kulim-based SilTerra to DNex-Beijing CGP consortium.
"We have accepted the offer from the DNeX consortium, subject to the execution of definitive agreements. We will make further announcements should there be any significant development," said a Khazanah spokesperson when contacted.
News of the successful bid has pushed DNeX shares higher.
As of 5pm yesterday, the stock rose 32.14 per cent or nine sen to 37 sen with 668.20 million shares traded, giving a market capitalisation of RM735.6 million.
The New Straits Times (NST) previously reported that DNeX was upbeat about exploring new growth area in semiconductor with SilTerra.
DNeX group managing director Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said the company would want to be given the opportunity to turn around SilTerra.
"We also want the bidding process to be based on merit including its contribution to the National Agenda – we believe we have the right partner, technology and market access. We have been working closely with the government to present our case," he reportedly said.
Syed Zainal said DNeX had secured Beijing CGP's support and commitment to help SilTerra have access to the right technology as well as the global market.
Khazanah reportedly had whittled down the takeover offer for SilTerra to two local companies from four bidders originally,
The other offer came from Green Packet Bhd.
The DNeX-Beijing CGP consortium reportedly planned to bring in investee companies to Malaysia to support the development of the local semiconductor eco-system. This was through an innovation fund to be set up by DNeX to help locals design and manufacture local products for international markets including China.
The proposal from DNeX was focused on planning and executing SilTerra's turnaround with a total investment of RM846 million, according to sources.
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.