[TOKYO] Tokuyama Corp, a Japanese maker of polysilicon, will sell its unit, Tokuyama Malaysia Sdn Bhd, to South Korea's OCI Co amid deteriorating conditions for the polycrystalline silicon market.
The Malaysian unit will issue new shares to OCI in a third-party allotment, Tokyo-based Tokuyama said in a statement Wednesday.
The first allotment will be worth US$24 million followed by the second for US$78 million. Tokuyama will also sell all shares of the unit to OCI for US$98 million.
After the transactions, Tokuyama Malaysia will be excluded from the consolidated earnings of Tokuyama, according to the statement.
Tokuyama expects to incur about an eight billion yen one-time charge for the quarter ending Mar 31, 2017.
Tokuyama Malaysia was set up in Aug 2009 to expand the semiconductor-grade and solar-grade polycrystalline silicon business, according to the statement.
"Due to the technological issues of manufacturing facilities and deteriorating market condition of solar-grade polycrystalline silicon, two huge impairment losses in connection with plants were posted," Tokuyama said in the statement.
Tokuyama decided that transferring the Malaysian business to OCI, which also makes polycrystalline silicon, "will be the best choice for parties," according to the statement.
Tokuyama ranks seventh among the top ten polysilicon makers in the world, according to Bloomberg Intelligence.