Debt-saddled Tsinghua Unigroup to turn from top buyer to big seller of semiconductor assets

Tsinghua Unigroup, a technology conglomerate affiliated with China’s top university, is moving closer to bankruptcy restructuring after years of debt-fuelled acquisitions in the semiconductor industry, kicking off a potential scramble for its assets by creditors and other interested parties.

Two Shenzhen-listed subsidiaries, information technology infrastructure provider Unisplendour Corp and integrated circuits designer Unigroup Guoxin Micro, announced in separate filings last week that their ownership structure could change after state-owned Huishang Bank, a creditor of Unigroup, asked a Beijing court to start bankruptcy proceedings against the company.

Unigroup, which had either defaulted or had cross-defaults triggered on seven onshore and offshore bonds worth about US$3.6 billion as of January, is left with no other options but to sell assets to pay off more than 200 billion yuan (US$30.8 billion) in total liabilities.

The company, according to a Reuters report last week, is trying to sell its 46.45 per cent stake in Unisplendour to potential investors, including Alibaba Group Holding and several state-backed entities. Neither Unisplendour nor Alibaba, owner of the South China Morning Post, could confirm or deny these talks.

Bankruptcy restructuring represents a big fall for Beijing-based Unigroup, which was once seen as a major player in the country’s efforts to boost semiconductor self-reliance amid the escalating US-China tech war.