CHINESE CHIP MAKER TSINGHUA UNIGROUP IS ON THE VERGE OF BANKRUPTCY

Last Friday, Tsinghua Unigroup confirmed reports that a lawsuit against the company had been filed in the People's Court of Beijing Municipality. State bank Huishang, an investor of the company, has demanded protection from its possible bankruptcy. The reason was a $ 3.6 billion the delay in payments on securities since November.

The company has two main owners: Tsinghua State University, which owns the company through a subsidiary of Tsinghua Holdings, and a private investor, Beijing Jiankun. The company is known to own several high-tech enterprises for the production of solid-state memory chips (produced by the only YMTC plant in China) and SoC chips used in modern smartphones (manufactured by Unisoc).

According to a number of specialized media, last summer, the consortium had liquidity in the amount of $ 8 billion, while having debt obligations in the amount of $ 31 billion.

The restructuring that threatens the company can put an end to the construction of several large microelectronics production facilities.

Experts note that one of the options for overcoming the crisis may be the sale of the company’s stake in Unisoc. In any case, according to the company's management, the activities of the factories themselves will not be affected. Moreover, several subsidiaries of the consortium even announced a 30-50% increase in revenue in recent years.

The company posted a message in WeChat messenger, in which announced its desire to actively cooperate with the judiciary in the upcoming process to solve the debt risk issues while supporting the creditors' rights.

In recent years, the consortium has been actively supported by the PRC’s authorities, being considered the country's pivotal enterprise in the matter of import substitution. The company is a part of the ‘Made in China 2025 project’, the aim of which is to let the country completely get rid of the foreign dependence.