The acquisition of a mainland semiconductor manufacturing operation could add an estimated 50 million yuan (HK$46.88 million) to red-chip China Resources Logic's (CRL) bottom line by the end of next year.
Yesterday, executive director Ken Ong Thiam Kin said debt-ridden Wuxi-based China Huajing Electronics Group would become a potential income earner after a debt restructuring. During the weekend, CRL said it would pay 20 million yuan for 100 per cent of Huajing, which makes three-inch and six-inch wafers.
CRL expects robust mainland demand for semiconductor products used in consumer electronics and telecommunications devices.
State-owned Huajing has been labouring under heavy debts of 1.27 billion yuan and depreciation charges.
About four years ago it shifted focus from being a defence contractor to making consumer electronic components.
Cash-rich CRL, with HK$300 million in hand, plans to inject 500 million yuan over four years as part of the debt restructuring.