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MosChip to raise $2.16 m from stake sales

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CIOL Bureau
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BANGALORE: India's MosChip Semiconductor Technology Ltd. is raising Rs 105.3

million ($2.16 million) through stake sales in the firm to foreign companies, a

senior official said on Monday.

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The firm last week received permission from its shareholders and the

government to sell a 9.16 per cent stake to US firm ESS Technology and a 4.58

per cent stake to a subsidiary of Singapore-based contract manufacturer

Flextronics International, chief financial officer Vivek Bhargava told Reuters.

The money, raised through a preferential issue of equity and warrants, will

be used to fuel MosChip' business growth, he said. The firm will issue small

stakes to two other foreign entities.

MosChip designs and markets its application-specific integrated chips and

gets the capital-intensive manufacturing done by outside suppliers based in

countries like Taiwan. The government in a statement last week said ESS

Technology will invest Rs 105.3 million for a 72 per cent stake in MosChip but

Bhargava said this stake represents the total foreign holding in the firm after

the preferential issue is completed.

The investment of Rs 105.3 million is the total amount being raised by

MosChip in the latest round of funding. The shares are being sold at Rs 30, a 10

per cent premium to Monday's price of Rs 33.0.

MosChip will use the funds to meet its product development expenses and other

capital expenditure as many of its products are reaching the final stages of the

design cycle. Two of MosChip's key founders are industry veterans and have

worked for leading chip companies in Silicon Valley.

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