MosChip to raise $2.16 m from stake sales

By : |March 31, 2002 0

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.

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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