Tsinghua University’s chip research and development company, Purple Group, is in financial crisis and on the verge of bankruptcy. As Ziguang Group is unable to pay off its maturing bonds, it was petitioned by one of its creditors, Huishang Bank, to the court for bankruptcy reorganization on the 9th. Purple Group is currently carrying a debt of about $31 billion, and more bonds will mature next, so it is seeking to sell its shares of Purple, a total of 46.45% of the equity. Sources said Alibaba and several state-owned enterprises are interested in making a bid to buy part of its Purple shares. No word on whether the move is commercial or assigned to save the day.
According to a Central News Agency report today, Ziguang can not fall, rumors that Ali and Chinese state-owned enterprises to consider acquiring part of the stake. China’s Ziguang Group has recently been petitioned by creditors for bankruptcy reorganization due to its inability to pay off maturing bonds. To save Purple, it is rumored that Alibaba and a number of state-owned enterprises intend to bid to buy part of its Purple shares, amounting to $ 7.7 billion.
According to Reuters news agency, Ziguang Group is looking to sell its stake in Ziguang, totaling 46.45 percent, as it is currently carrying about $31 billion in debt and more bonds are set to mature next. The report cited sources familiar with the matter as saying that Alibaba and a number of Chinese state-owned companies may “come to the rescue” and are considering buying part of Purple’s stake. The value of Purple’s stake currently falls between $6.2 billion and $7.7 billion.
The sources mentioned that potential acquisition companies include Wuxi Industry Development Group, owned by the Wuxi Municipal Government, Beijing Electronics Holding Co. and JAC Capital, a government-backed semiconductor investment fund. In addition, Alibaba may also join forces with local state-owned enterprises. If the deal goes through, it would be the first Alibaba deal to be completed since Chinese regulators began cracking down on the tech industry, according to analysts.
Alibaba’s stake in Ant Technology Group was scheduled to be listed in Shanghai and Hong Kong last November, but was officially halted on the eve of its launch and subsequently faced a series of regulations; it was also fined 18.228 billion yuan in April this year for violating anti-monopoly laws. The news quoted a written response from Ziguang Group that, in order to mitigate debt risks, “the company (Ziguang) has approached several investors under the guidance of the capital attraction task force” and “Tsinghua Ziguang will make general arrangements for the introduction of strategic investors if it enters into judicial restructuring. “
The Central News Agency said that Ziguang Group is China’s largest semiconductor company, the main business areas include chips, cloud computing, a total of Ziguang State Micro, Ziguang shares and other enterprises. Purple has always been regarded as the leader of China’s semiconductor national team, Chairman Zhao Weiguo has boasted in the past to buy Taiwan’s TSMC and merge MediaTek.