China semiconductors: Tsinghua Unigroup’s creditors, shareholders back troubled tech conglomerate’s debt restructuring plan

Among the creditors who agreed to Tsinghua Unigroup’s debt restructuring plan, 1,069 have ordinary or unsecured claims totalling US$19.47 billion

Major shareholders Tsinghua Holdings Corp and Beijing Jiankun Investment Group Co have also approved the debt restructuring plan

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People check out semiconductors on display from Tsinghua Unigroup at an event in Beijing on September 19, 2020. Photo: AP

Published: 7:30pm, 30 Dec 2021Updated: 8:54pm, 30 Dec 2021

Tsinghua Unigroup said on Wednesday that most of its creditors and shareholders have approved its debt restructuring plan, as the once high-flying semiconductor conglomerate associated with China’s top university moved closer to ending a months-long renegotiation of its outstanding liabilities.

A successful vote in favour of that plan was reached on Wednesday during a second creditors’ meeting presided by Unigroup’s government-appointed custodian team, who briefed representatives of the company’s 1,075 creditors on the debt restructuring process, according to the Beijing-based firm’s statement published on its official WeChat account later the same day.

Among those who agreed to Unigroup’s debt restructuring plan, 1,069 creditors have ordinary or unsecured claims totalling 124.09 billion yuan (US$19.47 billion), while six have secured claims against what the firm owes them. Although 12 creditors with unsecured claims totalling 13.6 billion yuan were absent from the meeting, their non-attendance did not alter the outcome of the vote, according to Unigroup.

Unigroup, known for its unsuccessful US$23 billion bid for US chip maker Micron Technology in 2015, has been saddled with more than 200 billion yuan in total liabilities after years of aggressive expansion into areas beyond chips, including finance, energy and education. The firm started looking for deep-pocketed investors to continue its semiconductor and cloud computing operations after a court-ordered restructuring process formally began in July this year.

Tsinghua Unigroup’s headquarters in Beijing. Photo: Handout

Two major Unigroup shareholders, Tsinghua Holdings Corp and Beijing Jiankun Investment Group Co, also approved the restructuring plan, which will be submitted for court approval.

Unigroup’s debt restructuring plan will allow each creditor with a secured claim worth less than 1.2 million yuan to be fully repaid in cash, while each creditor with an unsecured claim of more than 1.2 million yuan will be able to redeem at least 95 per cent of the amount owed, according to the custodian team’s statement published on December 16.

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