Ferrotec : Notice of Third Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures Components for Semiconductor Manufacturing (Quartz Crucibles and Silicon Parts) picture_as_pdf PDF

News Release: Ferrotec Holdings Corporation (6890 TSE Standard)

May 17, 2022

Notice of Third Issuance of New Shares through Third-Party Allotment by Subsidiary that

Manufactures Components for Semiconductor Manufacturing (Quartz Crucibles and Silicon Parts)

Ferrotec Holdings Corporation (Representative Director: He Xian Han; hereinafter "the Company") announces that, at the meeting of Board of Directors held today, Ningxia Dunyuan Juxin Semiconductor Technology Corporation (hereinafter "FTNC*"), a subsidiary that manufactures components for semiconductor manufacturing (quartz crucibles and silicon parts) has decided to issue new shares through third-party allotment in order to increase production capacity. Details are as follows. *The abbreviation of the corporate name was changed from AQM-N to FTNC, and the new abbreviation has been used from the disclosure on September 24, 2021.

1. Reason and background for the third-party allotment

Among the semiconductor materials we supply for semiconductor manufacturing equipment, the silicon parts and quartz crucibles handled by FTNC have been adopted by many clients, so our business has been growing rapidly. Accordingly, FTNC issued new shares through second third-party allotment and allocated raised funds for strengthening our business by buying back the land and buildings for Yinchuan Plant from the government, purchasing equipment for large-diameter quartz crucibles and silicon parts, and building a R&D center for silicon materials, as mentioned in "Notice of Issuance of New Shares through Third-Party Allotment by Subsidiary that Manufactures Components for Semiconductor Manufacturing (Quartz Crucibles and Silicon Parts)" disclosed on August 6, 2021.

However, the demand for mainly silicon parts remains strong, and we are receiving business inquiries beyond our current production capacity and requests for the increase in production output from major clients, so we concluded that it is necessary to boost our production capacity further. As a result of discussions, we decided to increase the production output of the plant in the Changshan District, where many facilities of the Company are located.

FTNC is preparing for the listing on STAR Market of the Shanghai Stock Exchange. We decided to issue new shares through third third-party allotment and allocate raised funds to the investment in the swift increase of production capacity. Through this allocation of new shares, our ownership ratio will decline, but it is assumed that FTNC will remain an important consolidated subsidiary of the Company even after the listing.

2. Purpose of use of the proceeds to be raised

The raised funds amounting to 545 million yuan (about 10.5 billion yen) will be allocated to the construction of a new plant in Changshan, Quzhou, Zhejiang.

3. Outline of FTNC as of March 31, 2022

(1)	Name		Ningxia Dunyuan Juxin Semiconductor Technology Corporation
(2)	Address		23 Guangming West Road, Xixia Economic and Technological Development
			Zone, Yinchuan City, Ningxia, China
(3)	Title and name of		He Xian Han, Representative Director
	representative
(4)	Contents of business		Manufacture and sale of components for semiconductor manufacturing (quartz
			crucibles and silicon parts)
(5)	Capital		168,750,000 yuan (approx. 3.2 billion yen)
			*1 Chinese yuan = 19.24 yen
(6)	Date of establishment		April 20, 2011
			Shareholder	Current	After third-
	Major shareholder and				shareholding	party
(7)				ratio	allotment
shareholding ratio
		Hangzhou Dahe Thermo-Magnetics Co., Ltd.	66.68%	60.13%
			(FTH)
(8)	Relationship between		Capital relationship	FTNC is a subsidiary 66.68% of whose voting rights are

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
			FTNC and the company				owned by FTH, a consolidated subsidiary of the
							Company.
						Personnel relationship	The Representative Director of the Company
							concurrently serves as the director of FTNC.
						Business relationship	Nothing is applicable.
4. Overview of the third-party allotment
	(1)		Issue price per share		29.63 yuan/yuan of capital (approx. 570 yen)
						*1 Chinese yuan = 19.24 yen
	(2)		Total contribution amount		545 million yuan (approx. 10.5 billion yen)
	(3)		Settlement date		May 31, 2022 (scheduled)
	(4)		Increased capital		18,394,000 yuan (approx. 400 million yen)
	(5)		Registered capital after		187,144,000 yuan (approx. 3.6 billion yen)
			third-party allotment
						No.1 Shanghai Core Investment Management	1.08%
						No.2 Shanghai Aviation Industry Equity Investment Fund Partnership	0.36%
						(Limited Partnership)
						No.3 Shangrong (Ningbo) Investment Center (Limited Partnership)	0.72%
						No.4 Shangrong Juxin (Ningbo) Equity Investment Center (Limited	0.18%
						Partnership)
						No.5 Taizhou Huaruifengshou Equity Investment Partnership (Limited	0.72%
						Partnership)			0.27%
			Ownership ratio of each		No.6 Yinhe Yuanhui Investment Co., Ltd.	0.54%
	(6)			No.7 Zheshang Venture Capital Co., Ltd.	0.14%
		allocatee
				No.8 Shen Xiao Jing			0.04%
						No.9 Sheng Xiao Mou			1.80%
						No.10 Zhejiang Deep Reform Industrial Development Partnership	1.62%
						(Limited Partnership)			0.90%
						No.11 Shanghai Free Trade Zone Equity Fund Management Co., Ltd.	0.90%
						No.12 Zhejiang Fuzhe Equity Investment Fund Management Co., Ltd.	0.54%
						No.13 Shenzhen WinWin Jingxing Investment Partnership (Limited
						Partnership)
						No.14 CITIC Securities Investment Co., Ltd.

*The issue price was determined based on an evaluation of the stock's fair value by a third-party organization that is independent from the Company and allottees, and then the shares were allotted.

5. Overview of the allottees

		No.1	No.2
			Shanghai Aviation Industry Equity
(1)	Company name	Shanghai Core Investment Management	Investment Fund Partnership
			(Limited Partnership)
(2)	Capital	30 million yuan	1,010 million yuan
(3)	Date of establishment	May 26, 2015	November 2, 2020
	Major shareholders		Shanghai Pudong Science and
	Shanghai Qingyuntu Investment	Technology Innovation Investment Fund
(4)	and shareholding
Partnership (Limited Partnership): 44%	Partnership (Limited Partnership):
	ratio
		49.50%
			Business partner: Shanghai Haiwang
(5)	Representative	Li Ya Jun	Lingyun Investment Management Co.,
			Ltd.
(6)	Contents of business	Industrial investment, investment	Investment in shares, venture capital,

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
			advisory, and investment management	investment management, and investment
			(excluding brokerage)	consulting
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
	(7)	FTNC and the	business relationships, and the company	business relationships, and the company
		companies	does not belong to related parties.	does not belong to related parties.
	(8)	Contribution amount	60 million yuan (1.2 billion yen)	20 million yuan (380 million yen)
*1 Chinese yuan = 19.24 yen
			No.3	No.4
	(1)	Company name	Shangrong (Ningbo) Investment Center	Shangrong Juxin (Ningbo) Equity
	(Limited Partnership)	Investment Center (Limited Partnership)
	(2)	Capital	1,015 million yuan	343.4 million yuan
	(3)	Date of establishment	September 7, 2015	November 30, 2020
		Major shareholders	Ningbo Heyuan Holding Co., Ltd.:	Wang Fu Yuan: 49.50%
	(4)	and shareholding	83.25%	Wang Mei Qin: 49.50%
		ratio
	(5)	Representative	Business partner: Shangrong Capital	Business partner: Shangrong Capital
	Management Co.,Ltd.	Management Co.,Ltd.
			Investment in shares, industrial	Investment in shares
			investment, investment management,
	(6)	Contents of business	asset management, financial consulting,
			corporate investment consulting, and
			business administration consulting
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
	(7)	FTNC and the	business relationships, and the company	business relationships, and the company
		companies	does not belong to related parties.	does not belong to related parties.
	(8)	Contribution amount	40 million yuan (770 million yen)	10 million yuan (190 million yen)
*1 Chinese yuan = 19.24 yen
			No.5	No.6
			Taizhou Huaruifengshou Equity	Yinhe Yuanhui Investment Co., Ltd.
	(1)	Company name	Investment Partnership (Limited
			Partnership)
	(2)	Capital	280 million yuan	3,000 million yuan
	(3)	Date of establishment	January 25, 2022	December 10, 2015
		Major shareholders	Taizhou Asset Management Co., Ltd.:	China Galaxy Security Co., Ltd.: 100%
	(4)	and shareholding	65%
		ratio
	(5)	Representative	Business partner: Zhejiang Fuhua Ruiyin	Wu Li Hong
	Investment Management Ltd.
			Investment in shares and venture capital	Use of personal funds, establishment of
				direct investment funds, investment in
	(6)	Contents of business		corporate shares or bonds, other
		investment funds investing in shares or
				bonds, industrial investment, asset
				management, and investment consulting
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
	(7)	FTNC and the	business relationships, and the company	business relationships, and the company
		companies	does not belong to related parties.	does not belong to related parties.
	(8)	Contribution amount	40 million yuan (770 million yen)	15 million yuan (290 million yen)
*1 Chinese yuan = 19.24 yen
			No.7	No.8

News Release: Ferrotec Holdings Corporation	(6890 TSE Standard)
	(1)	Company name	Zheshang Venture Capital Co., Ltd.	Shen Xiao Jing
	(2)	Capital	721.9 million yuan	-
	(3)	Date of establishment	November 16, 2007	-
		Major shareholders	Zhejiang Zhongjian Enterprise	-
	(4)	and shareholding	Management Co., Ltd.: 38.71%
		ratio
	(5)	Representative	Chen Yue Meng	-
			Industrial investment, investment	-
			management/consulting, asset
			management, business administration
	(6)	Contents of business	management services, technological
	development, technological
			services/consulting, engineering
			management services, real estate
			brokerage, import and export
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
	(7)	FTNC and the	business relationships, and the company	business relationships, and the company
		companies	does not belong to related parties.	does not belong to related parties.
	(8)	Contribution amount	30 millon yuan (580 million yen)	8 millon yuan (150 million yen)
*1 Chinese yuan = 19.24 yen
			No.9	No.10
			Sheng Xiao Mou	Zhejiang Deep Reform Industrial
	(1)	Company name		Development Partnership(Limited
				Partnership)
	(2)	Capital	-	4,220 million yuan
	(3)	Date of establishment	-	November 29, 2018
		Major shareholders	-	Zhejiang Manufacturing Fund
			Partnership(L.P.): 47.39%
	(4)	and shareholding
		Zhejiang Fu Zhe Capital Management
		ratio
			Co., Ltd.: 47.39%
	(5)	Representative	-	Business partner: Zhejiang Fu Zhe
		Capital Management Co., Ltd.
	(6)	Contents of business	-	Industrial investment and investment in
		shares
		Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
	(7)	FTNC and the	business relationships, and the company	business relationships, and the company
		companies	does not belong to related parties.	does not belong to related parties.
	(8)	Contribution amount	2 million yuan (40 million yen)	100 million yuan (1.9 billion yen)
*1 Chinese yuan = 19.24 yen
			No.11	No.12
	(1)	Company name	Shanghai Free Trade Zone Equity Fund	Zhejiang Fu Zhe Capital Management
	Management Co., Ltd.	Co., Ltd.
	(2)	Capital	33.6 million yuan	30 million yuan
	(3)	Date of establishment	February 28, 2015	June 15, 2018
			Shanghai International Airport Co., Ltd.:	Zhejiang Manufacturing Fund
		Major shareholders	14.29%	Partnership (L.P.): 40%
		Shanghai International Group	Zhejiang Fu Zhe Capital Management
	(4)	and shareholding
	Corporation Limited: 14.29%	Co., Ltd.: 40%
		ratio
		Shanghai Waigaoqiao Free Trade Zone
			Group Co., Ltd.: 14.29%

News Release: Ferrotec Holdings Corporation (6890 TSE Standard)

		Shanghai Lujiazui Financial Holdings
		Co., Ltd.: 14.29%
		China Orient Asset Management Co.,
		Ltd.:14.29%
		Huiyuan Investment Management
		(Shanghai) Co., Ltd.: 14.29%
		Cinda Capital Management Co., Ltd.:
		14.29%
(5)	Representative	Wu Jian Ping	Wu Bin
		Share investment management, venture	Private equity investment, and
(6)	Contents of business	capital management, industrial	management thereof
		investment, and investment consulting
	Relationship between	There are no capital, personnel, or	There are no capital, personnel, or
(7)	FTNC and the	business relationships, and the company	business relationships, and the company
	companies	does not belong to related parties.	does not belong to related parties.
(8)	Contribution amount	90 million yuan (1.7 billion yen)	50 million yuan (960 million yen)

*1 Chinese yuan = 19.24 yen

		No.13	No.14
(1)	Company name	Shenzhen WinWin Jingxing Investment	CITIC Securities Investment Co., Ltd.
Partnership (Limited Partnership)
(2)	Capital	10 million yuan	14,000 million yuan
(3)	Date of establishment	May 13, 2021	April 1, 2012
	Major shareholders	Liu Yu: 50%	CITIC Securities Co., Ltd.: 100%

1. and shareholding
   ratio

			Business partner: Shenzhen Hua Yu	Fang Hao
(5)	Representative	Business Venture Capital Center (Limited
					Partnership)
(6)	Contents of business		Investment in business startups	Investment in financial instruments,
			securities, and shares
		Relationship between		There are no capital, personnel, or	There are no capital, personnel, or
(7)	FTNC and the	business relationships, and the company	business relationships, and the company
		companies		does not belong to related parties.	does not belong to related parties.
(8)	Contribution amount		50 million yuan (960 million yen)	30 millon yuan (580 million yen)
*1 Chinese yuan = 19.24 yen
6. Schedule
	(1)	Date of resolution by the		May 17, 2022
		Board of Directors of the
		Company
	(2)	Date of resolution by FTNC	May 5, 2022
		Board of Directors
	(3)	Date of resolution by the		May 20, 2022 (scheduled)
		shareholders meeting of
		FTNC
	(4)	Settlement date			May 31, 2022 (scheduled)

7. Future outlook

The impact on the business performance of the Company for the current fiscal year through this matter is expected to be

minor. However, we will promptly disclose relevant items as soon as they are confirmed.