Slaughter and May is advising SMIC on the first proposed RMB share issue by a Hong Kong listed non-PRC issuer on the SSE STAR Market

Slaughter and May is advising its longstanding client Semiconductor Manufacturing International Corporation (SMIC), a company incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, on the first proposed RMB share issue by a Hong Kong listed non-PRC issuer on the Shanghai Stock Exchange Science and Technology Innovation Board (SSE STAR Market).

The proposed RMB share issue was announced on 5 May 2020. SMIC proposes to issue and list no more than 1685.62 million shares on the SSE STAR Market, representing no more than 25% of the total number of issued shares as at 31 December 2019 as enlarged by the number of RMB shares proposed to be issued.

SMIC is the first pure-play foundry in Mainland China to enter into mass production with 28nm wafer process technology for mobile computing applications and the first pure-play foundry in Mainland China to offer 40nm embedded Flash, Radio Frequencies wafer solutions for SIM Card, Internet-of-Things (IoT) related wireless connectivity applications and 24nm NAND Flash memory wafer process technology. SMIC drives its value-added wafer manufacturing process technologies for specialty products which are essential building blocks for the mobile computing market, the growing automotive electronics market and IoT market.

Approximately 40% of the capital raised will be used to build a new manufacturing plant for 12-inch chips, while nearly 40% will be used as additional working capital. The remainder will be allocated to reserves for the research and development of advanced technologies.

The SSE STAR Market was launched in July 2019 as a new fundraising platform to drive innovation and new sources of growth. It mainly supports high-tech industries and strategic emerging industries. On 29 April 2020, there were 100 companies listed on the SSE STAR Market and among them, those in the new-generation information technology and the bio-pharmaceutical sectors account for more than 60% of the total, with 39 and 25 enterprises respectively, and there are 15, 12 and 9 companies in the sectors of high-end equipment, new materials, and energy conservation and environmental protection respectively.

Benita Yu Senior Partner
Christine Yu Counsel
Jason Chan Associate
Benedict Tang Associate