MIGDAL HAEMEK, Israel & NEWPORT BEACH, Calif. -- TowerJazz, the global specialty foundry leader, today announced that it has agreed to sell its holdings in Hua Hong Semiconductor Limited (“HHSL”), one of Mainland China's leaders in the field of IC foundry service, in an HHSL buyback transaction, for $32 million in cash.
TowerJazz owns 10% of HHSL’S shares, valued per GAAP in the amount of $17 million on TowerJazz's balance sheet.
Russell Ellwanger, TowerJazz CEO, commented: "This transaction is another step in our business growth strategy, providing us with additional cash which may enable us to fund our continued growth initiatives. Our relationship and supply agreement with HHSL and its wholly owned subsidiary HHNEC are independent of an equity position.”
The transaction is subject to customary closing conditions and is expected to close during the third quarter of 2011. TowerJazz expects to record a gross gain in the third quarter of $15 million as a direct result of this sale, and approximately $8 million of net gain (after taking into account expected tax and other payments and fees associated with the transaction).
Tower Semiconductor Ltd.