ASTI: S$17.2m was 'success fee' paid to financial adviser for disposal of semiconductor unit

MAINBOARD-listed ASTI Holdings said that in its proposed disposal of its wholly owned subsidiary, Semiconductor Technologies & Instruments Pte Ltd, for a cash consideration of S$90 million, its estimated expenses of S$17.2 million on the deal was a success fee paid to VSA Capital Shanghai, the financial adviser for the disposal.

This left net proceeds of the sale at about S$72.8 million.

The success fee was calculated based on certain formulae and agreed thresholds between ASTI and VSA Capital Shanghai, the semiconductor equipment manufacturer said in filing with the Singapore Exchange late Monday.

ASTI added that the success fee was to motivate the financial adviser to get the best deal for the company.

ASTI Holdings had on March 30 entered into a sale and purchase agreement with Shanghai Pudong Science and Technology Investment (PDSTI), to sell its core semiconductor technologies and instruments businesses, collectively known as the STI Group, for S$90 million in cash, plus an additional S$38 million in dividends.

"Under the circumstances, considering the total transaction value is potentially up to S$128 million, the company is of the view that the financial adviser has been successful in assisting the company with the disposal of the STI Group," ASTI said.

In addition, the company said that it had previously received offers for the STI Group that were, even after deducting the success fee, substantially lower than the potential total transaction value. Accordingly, the company is of the view that the success fees are justifiable.

ASTI shares closed S$0.004 or 4.7 per cent lower at S$0.081 on Monday.