TAIPEI (Taiwan News) — Tsinghua Unigroup said last Friday (July 9) that one of its creditors has asked Chinese courts to begin bankruptcy proceedings for the group.
The state-backed company said it received a notice from a Beijing court saying a Hong Kong-listed bank based in Anhui province, Huishang Bank Corp Ltd., had asked the court to begin bankruptcy and reorganization proceedings over failure to repay debts, according to The Wall Street Journal (WSJ). The move comes after Tsinghua Unigroup missed a series of bond payment deadlines since last November, Nikkei said.
At the beginning of the year, Tsinghua Unigroup had either defaulted or had cross-defaults activated on seven onshore and offshore bonds worth around US$3.6 billion, Nikkei cited Refinitiv as saying. The group said over its website it would cooperate in legal proceedings and alleviate its debt risks, in addition to helping the court protect creditors’ interests, per WSJ.
Tsinghua Unigroup was originally a state-backed company dealing in tech services, natural gas, and Chinese herbal medicine, but it became a chip conglomerate mainly by way of acquisitions, according to WSJ. Unigroup is now involved in memory chips, mobile chipsets, cloud computing chips, and smartcards, in addition to online gambling.
The company had previously received heavy support from local and central governments amid China’s push to foster a self-reliant semiconductor industry. Among the more notable companies that Unigroup owns is Yangtze Memory Technologies Co, which owns a fab that can make both 3D NAND memory and logic, while it also owns Unisoc, a large developer of mobile phone chipsets, according to Tom’s Hardware.
The group said the restructuring would not affect the company’s production or other operations. One source told Nikkei that due to the Chinese government’s push for a domestic semiconductor industry, “any effect on how group companies are run would be limited.”
