Red-chip China Resources Logic has begun a big push into the mainland semiconductor sector with the planned purchase of a state-owned plant in Wuxi and talks to form co-operation alliances with foreign high-technology enterprises.
Deputy chairman and chief executive Chen Lang yesterday said the acquisition of China Huajing Electronics Group and lining up with international players would make the company one of the leading players in China producing lower-end wafers.
Parent company, the state-run China Resources Holdings, was negotiating the purchase and subsidiary China Resources Logic would receive the assets, Mr Chen said.
Established 50 years ago, China Huajing achieves annual sales of about one billion yuan (HK$937.1 million).
Mr Chen said the firm's operations were profitable but failed to achieve a positive bottom line partly due to heavy debt. 'We are talking with Huajing's creditors to find ways to restructure the loans and hope the company will become profitable following the transaction,'' he said.
China Resources Logic expects a return on investment of 15 per cent.
Mr Chen did not disclose the price details but said his firm's cash-on-hand of more than HK$300 million would be enough to cover the deal.
