Shares of China Resources Microelectronics soared as much as 30 per cent to close at 43.5 HK cents yesterday after the mainland semiconductor company said its controlling shareholder, China Resources Holdings, may make a buyout offer of at least 48 HK cents a share.
The stock resumed trading yesterday after being suspended on June 28 following the company's announcement that CR Holdings was considering a privatisation proposal.
The HK$0.48 per share represents a premium of 43 per cent compared to the company's closing price on June 27 of HK$0.33. The offer price would still represent a 10 per cent premium over yesterday's close.
CR Holdings holds 60.6 per cent of its Hong Kong-listed subsidiary.
CR Microelectronics said in its statement that its bank loans were coming due and Beijing's credit-tightening policies were likely to create a challenge for the company in renewing its existing credit facilities.
Even if it is able to obtain financing, the costs will 'inevitably be much higher than the existing rate and may not be commercially viable' to the company. CR Microelectronics also said it was in need of additional capital to finance the operations of the loss-making 8-inch wafer fabrication facility, jointly owned by CR Holdings and itself.