Chinese Chipmaker Tsinghua Unigroup Completes Bankruptcy Reorganization

What’s new: An investment vehicle has taken full ownership of Tsinghua Unigroup Co. Ltd., concluding a bankruptcy reorganization plan the Chinese semiconductor conglomerate unveiled last year to deal with its debt crisis.

Tsinghua Unigroup has updated its business registration materials to show that Beijing Zhiguangxin Holding Co. Ltd. now owns 100% of the company, according to an exchange filing published on Monday.

Zhiguangxin was created in November 2021 by a consortium led by Wise Road Capital Ltd. and Beijing Jianguang Asset Management Co. Ltd. and has 54.9 billion yuan ($8.2 billion) of registered capital.

Also on Monday, Wise Road’s actual controller Li Bin was elected as the new chairman of Tsinghua Unigroup to replace Zhao Weiguo, who led the company for more than a decade, Caixin has learned.

The background: Established in 1993, Tsinghua Unigroup was once at the forefront of China’s drive to develop an independent semiconductor industry. The company embarked on a series of acquisitions and investments in the capital-intensive integrated circuit sector between 2013 and 2019, building ties with Intel Corp. and HP Inc. and emerging as a major player.

But it failed to generate income quickly in an industry known for huge costs of entry and long payback periods. Since late 2020, the company has defaulted on a raft of bonds amid an escalating capital crunch.

In December 2021, the consortium led by Wise Road and Jianguang beat out Alibaba Group Holding Ltd. to become strategic investors and draft a restructuring plan to rescue the beleaguered group.

Contact reporter Ding Yi (yiding@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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