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30 October 2019

POET’s $26m sale of DenseLight subsidiary to close on or before 8 November

POET Technologies Inc of Toronto, Ontario, Canada and San Jose, CA, USA — a designer and manufacturer of optoelectronic devices, including light sources, passive waveguides and photonic integrated circuits (PIC) for the sensing and datacom markets — says that the sale of its subsidiary DenseLight Semiconductors Pte Ltd to DenseLight Semiconductor Technology (Shanghai) Co Ltd (DL Shanghai, a special-purpose company organized by China Prosper Group on behalf of investors) will close on or before 8 November.

DL Shanghai was established to acquire the capital stock of DenseLight from POET for US$28m. The lead shareholders in DL Shanghai are Dynax Semiconductors (Suzhou Nengxun High Energy Semiconductor Co), one of Dynax’s major shareholders, the Suzhou Xiang Cheng District Investment Fund and a developer and manufacturer of gallium arsenide (GaAs)-based fiber lasers and optical passive devices for high-powered lasers. Other shareholders include established funds and investors in the technology and communications industry in China. Dynax is said to be China’s leading developer of gallium nitride (GaN)-based electronic devices for RF microwave and industrial control in 5G mobile communication and broadband communication.

Widely reported instances of more strict and careful review of foreign currency conversion applications by regulators in the China have curtailed several forms of foreign investment by Chinese investors and prolonged the Overseas Direct Investment (ODI) process, POET says. In the case of the sale of DenseLight, the result is a short delay in the ODI process and subsequent transfers needed to make the first tranche payment of US$8m to POET. With the extended review process likely to continue for some time, and to ensure that all interested investors in DL Shanghai are able to participate, POET has agreed to receive the total purchase price of US$26m in three tranches, with the first being a payment of US$8m on or before 8 November plus two additional installments of (i) US$13m on or before 31 December and (ii) US$5m on or before 31 May 2020. The additional US$2m to be paid on behalf of the buyer DL Shanghai to Oak Capital for due diligence, legal and other expenses will be made to POET and remitted to Oak Capital with the second tranche payment. POET says that the buyer has provided documentary evidence that the funds needed for the first tranche payment are present in its accounts and will continue to inform it on the status of its ODI applications, conversion to US dollars and associated bank transfers. The sale will close upon receipt of the US$8m into POET’s account.

POET also says that it has received final approval for the sale transaction from the TSX Venture Exchange and confirmed, as previously agreed, that DL Shanghai will be responsible for the operating expenses of DenseLight Singapore beginning on 1 November.

See related items:

POET’s shareholders approve sale of DenseLight subsidiary

POET agrees sale of DenseLight for $28m to Dynax-led concern

POET reschedules shareholder meeting to allow more time for internal approvals of DenseLight sale

POET announces bridge financing exceeding needs till DenseLight sale

POET receives US$26–30m offer for DenseLight subsidiary

Tags: POET

Visit: www.poet-technologies.com

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