Magnachip sells fab and foundry to private equity for $350m

Magnachip sells fab and foundry to private equity for $350m

Business news |
By Nick Flaherty

MagnaChip Semiconductor has sold its mixed signal foundry business and Fab 4 in Korea to two local private equity companies for $350m.

The deal reduces the debt on the rest of the company and sees Fab 4 and staff moving over to Magnus Semiconductor. This is owned by Alchemist Capital Partners Korea Co., Ltd. and Credian Partners, both based in Korea. 

Magnachip intends to use approximately $227.4m from the deal  to pay off all its outstanding 6.625% Senior Notes due 2021, of which $224.25m was due on August 31, 2020. 

“This represents a pivotal chapter for MagnaChip as we are transforming into a streamlined, pure-play standard products company focused on the attractive growth opportunities in our Display and Power businesses,” said YJ Kim, CEO of Magnachip. “We will use a portion of the net proceeds from the sale to de-leverage by paying off $224.25 million of our outstanding debt, eliminating a substantial portion of our annual interest expense. With sharpened focus and an improved balance sheet, we are committed to strive for sustainable and profitable growth.” 

“The Board of Directors is pleased with the successful close of the transaction,” said Camillo Martino, Chairman of the Board of MagnaChip. “The company is positioning for continued future success, enhancing our shareholders’ value.”

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