July 17, 2017 / 5:40 AM / 4 months ago

UPDATE 1-Tsinghua Unigroup says abandoned restructuring will not impact business

(Adds group company comment)

By Sijia Jiang

HONG KONG, July 17 (Reuters) - Chinese state-owned semiconductor group Tsinghua Unigroup said the cancellation of an asset restructuring plan will not affect the development of a $24-billion memory chip manufacturing project.

“Unigroup Guoxin’s termination of the major asset restructuring will have no impact on the construction, operation and development of Yangtze Memory Technologies,” Tsinghua Unigroup said in a statement on Monday. It is the controlling shareholder of both units.

Shenzhen-listed Unigroup Guoxin said in a filing Sunday evening that it terminated a plan to acquire Yangtze Memory because of “immature timing”, sending its shares down 10 percent in resumed trade on Monday.

Unigroup Guoxin said the timing was not right as the target’s memory chip plant, involving large investment, was still in the initial phase of construction and would not generate sales in the short term. It also said it could not reach agreement with an unnamed transaction partner.

Wuhan-based Yangtze Memory Technologies, also known as Changjing Storage, is the main body of a $24 billion “national memory base project” to manufacture 3D NAND flash.

Tsinghua Unigroup said the project was going according to schedule since breaking ground in December. It said it would stick to a “chip to cloud” strategy, keep investing in Yangtze Memory and accomplish the task of building the national base.

Reporting by Sijia Jiang; Editing by Stephen Coates

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