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https://scmp.com/business/companies/article/3046786/tianjins-government-talks-sell-two-listed-technology-firms Companies
Tianjin’s government is in talks to sell two listed technology firms to Chinese consumer electronics giant TCL
- The discussions involved holdings in chip devices maker Tianjin Zhonghuan Semiconductor, and Tianjin Printronics Circuit, a printed circuit boards producer, according to people familiar with the matter
- Tianjin’s government and TCL are still exploring options including direct stake sales or having the electronics company acquire control in the major shareholder of the two listed firms, said the people
A general view of televisions at the TCL (The Creative Life) booth at the 2012 International Consumer Electronics Show at the Las Vegas Convention Center on January 11, 2012 in Las Vegas. Photo: Getty Images/AFP
The government of Tianjin is in early talks to sell stakes in two of its listed technology firms to Chinese consumer electronics giant TCL, according to people familiar with the matter.
The discussions involved holdings in chip devices maker Tianjin Zhonghuan Semiconductor, and Tianjin Printronics Circuit, a printed circuit boards producer, the people said.
Tianjin’s government and TCL are still exploring options including direct stake sales or having the electronics company acquire control in the major shareholder of the two listed firms, said the people, who asked not to be identified as the discussions are private.
TCL has been shifting its focus to technology and hence has been studying the industry including the relevant companies, it said in an exchange filing on Sunday. The firm hasn’t reached any concrete agreement and will make an announcement on any progress, it said.
Tianjin Printronics shares rose as much as 4.1 per cent on Monday before falling 1 per cent as of 10:18am in Shenzhen. Tianjin Zhonghuan climbed as much as 5 per cent, giving it a market value of 41.3 billion yuan (US$6 billion).
Tianjin, a port city near Beijing, has one of the highest ratios of debt through local government financing vehicles to GDP in China and has seen rating downgrades among several government-related entities.
Tewoo Group, a major commodities trader based in Tianjin, recently became the biggest dollar bond defaulter among China’s state-owned companies in two decades.
TCL has been a strong backer of Tianjin’s efforts to restructure its debt and introduce private investment in state-owned companies. The Huizhou-based company in 2015 invested in Tianjin 712 Communication and Broadcasting, a communication equipment maker. TCL is the second largest shareholder with a 19 per cent stake in the firm, according to data compiled by Bloomberg.
In November, TCL signed a strategic cooperation deal with the Tianjin government that involves investments in industries from semiconductor to artificial intelligence, according to an announcement at that time. TCL also led the set-up of a 10 billion yuan fund that supports hi-tech start-ups in the city.
Tianjin Zhonghuan Electronic and Information Group, which is directly under Tianjin’s State-owned Assets Supervision and Administration Commission, holds a 28 per cent and a 25 per cent stake in Zhonghuan and Printronics respectively, according to data compiled by Bloomberg.
Deliberations are at preliminary stage and may not lead to a transaction, said the people, who asked not to be identified as the information is private. A representative for Tianjin government didn’t respond to requests for a comment last week, while representatives for Tianjin Zhonghuan and Tianjin Printronics said they have no information on the matter.