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SMIC chips away at secondary listing
Posted on Monday, 06 July 2020 12:29
Semiconductor Manufacturing International (SMIC) could raise as much as CNY 53.23 billion (USD 7.53 billion) after pricing its secondary listing on the Shanghai Stock Exchange Sci-Tech Innovation Board at CNY 27.46 apiece.

The Cayman Islands-incorporated chip maker’s offering of 1.69 billion A shares would initially fetch CNY 46.29 billion.

However, it has provided its joint lead underwriters with a 252.84 million stock-overallotment option which, if exercised, would push the overall size of the sale of a 26.2 per cent post-issue stake to CNY 53.23 billion.

Central state-owned China Information and Communication Technology (CICT) is subscribing for CNY 1.99 billion-worth of shares.

Shanghai Integrated Circuit Industry Investment Fund, the local integrated circuit industry investment fund established by the Shanghai Municipal Government, will buy 18.21 million stocks for CNY 500.00 million.

The board of SMIC believes the secondary listing will enable the company to access China’s capital market “by way of equity financing and improve its capital structure while maintaining its international development strategy”.

It is of the opinion that the subscription by existing shareholder CICT should strengthen the long-term strategic relationship between the two.

On one hand, SMIC is a leading, homegrown, large-scale integrated circuits (IC) foundry enterprise with an international position.

CICT, meanwhile, is the sole central enterprise with mobile communications and IC technologies.

Together, they could strengthen their strategy planning in key information technology industry chain areas, such as Internet of Things, cloud computing and big data.

Zephyr, the M&A database published by Bureau van Dijk, shows SMIC’s secondary listing will be the third-largest announced globally on record.

Alibaba’s sale of 2.7 per cent stake worth USD 12.93 billion to gain admission to the Hong Kong bourse in November 2019 is currently the biggest.

China Construction Bank is second after raising USD 7.72 billion by completing a secondary listing in Shanghai in 2007.

© Zephus Ltd