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SEMICONDUCTOR equipment manufacturer Asti Holdings is looking to sell several of its wholly-owned units, known collectively as STI Group, to Shanghai Pudong Science and Technology Investment Co for around S$100 million.
The Mainboard-listed firm told the Singapore Exchange in a filing on Monday that it has entered into a term sheet with Shanghai Pudong.
The two parties will have exclusive negotiation for 60 days from the effective date of the term sheet.
STI Group designs, builds and markets semiconductor manufacturing equipment used in the production of integrated circuits, which are widely used in industries such as automotive, communications, consumer electronics, data processing and aerospace.
STI Group has been profitable over the past few years, said Asti.
Meanwhile, Shanghai-based Shanghai Pudong is an investment company currently focused on domestic and cross-border investments in integrated circuit, health care and other high-tech industries, with a current registered capital of three billion renminbi (S$611.3 million).
Its shareholders include Shanghai HTY Venture Investment Partnership (Limited Partnership), Shanghai Shangshi Asset Management Co, and Shanghai Pudong Investment Holding Co.
Asti executive chairman and chief executive Michael Loh noted that STI Group has been an important part of the group's business with good profit contributions, and that the potential merger and acquisition would "unlock the value that we have built over years".
"While Asti is financially and technologically adequate in its current position, the transaction would substantially increase our cash balance and shareholder value. The new robust balance sheet will give all our business units the necessary working capital and resources to explore more opportunities and achieve accelerated growth in future," he added.
Asti, which had a market capitalisation of about S$60 million as at Dec 18, had previously entered into a non-binding negotiation with China Fortune-Tech Capital Co to sell STI Group. "As Asti didn't deem the terms and conditions and the offer feasible to the group, it has called off that exclusivity and opened the option to other potential buyers," it said.
Asti shares last traded at 8.8 Singapore cents on Dec 15.