Chinese chipmaker Wingtech’s unit seeks up to US$1 billion in loan

NEXPERIA Holding, the Dutch unit of Shanghai-listed Wingtech Technology caught in the US-China semiconductor dispute, is looking to raise as much as US$1 billion in a five-year loan, according to sources familiar with the deal.

The indicative pricing is mid-130 basis points over the Secured Overnight Financing Rate, or SOFR, said the sources, who asked not to be identified because they are not authorised to speak publicly on the deal.

The chipmaker has mandated DBS Bank as the sole bank to arrange for a group of lenders for the loan with a greenshoe option, they said. The bank is holding calls and roadshows for the loan syndication, and will start marketing it on Wednesday (Oct 18), they said.

“Nexperia has indeed initiated an exercise to arrange for a group of lenders for a loan aimed at repaying old debt and for general corporate purposes,” Hannes van Raemdonck, Nexperia’s senior director, said. He declined to disclose further details about the loan.

The company is facing heat following the Dutch government’s alliance with the US earlier this year to further restrict exports of chip technology to China. Dutch authorities are reviewing Nexperia’s acquisition of another Netherlands-based chipmaker, Nowi, as the country has for the first time the power to stop foreign takeovers of domestic companies on national security grounds.

Last year, the UK, citing national security concerns, ordered Wingtech to undo its acquisition of Britain’s biggest microchip factory more than a year after the deal closed.

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Back home, Wingtech is facing its own issues. The company said in July that its chairman and president was under investigation for not disclosing that he was the concert party of Wingtech’s controlling shareholder.

Nexperia had US$506 million of debt outstanding as at December 2022, according to an annual sustainability report on its website. It announced a US$1.5 billion financing in September 2019 to fund its growth, while it secured US$800 million in 2018 to refinance existing debt and capital expenditure. BLOOMBERG