Narrative
Full Description
Project narrative
In May 2009, ICBC (London) PLC entered into a £7.3 million GBP revolving credit facility (RCF) agreement with Dynex Semiconductor Limited — an England and Wales-incorporated specialist high power semiconductor manufacturer headquartered in Lincoln, England and wholly-owned subsidiary and sole operating company of Dynex Power Inc., a Canada-incorporated company headquartered in England listed on the TSX Venture Exchange but 75% owned by Zhuzhou CSR Times Electric Co., Ltd. — for the expansion of its insulated-gate bipolar transistor (IGBT) fabrication facility. This RCF carried a maturity period of 12 months and an interest rate at the appropriate LIBOR rate plus a margin of 1.35%. TEC issued a guarantee for this RCF. The proceeds of this RCF were to be used by the borrower to support the £12 million GBP expansion of its IGBT fabrication facility in Lincoln, England; specifically, it would support the installation of two six-inch diameter IGBT silicon chip wafer fabrication lines, replacing the existing four-inch diameter line, which would increase output tenfold and was framed as a research & development (R&D) center. The expansion would allow Dynex Semiconductor to meet CSR Times Electric's demand for silicon wafers for power modules for Chinese rail operators and make Dynex Semiconductor more competitive with power semiconductor module suppliers globally. The RCF was intended to get the expansion project underway while longer-term financing could be sourced. In October 2009, Dynex Power filed a preliminary prospectus with the securities commissions in the Canadian provinces of British Columbia, Alberta, and Ontario for a rights offering. The net proceeds of the right offering, if completed, would be used by Dynex to repay the ICBC loan and to complete the expansion project. By October 2014, the expansion of the IGBT facility had been completed.
Staff comments
1. In 2008, Zhuzhou CSR Times Electric had purchased a 75% stake in Dynex. In July 2014, CSR Times Electric opened a $240 million USD IGBT fabrication plant, the first of its kind in China, using technology developed by Dynex Semiconductor. 2. IGBTs are three-terminal power semiconductor devices, primarily forming an electronic switch, used in high-efficiency electric energy conversion systems present in variable-speed drives, trains, electric and hybrid electric vehicles, power grids and renewable energy plants. In 2018, the acquisition of Dynex Semiconductor was being discussed in hindsight as having national security concerns, with allegations it was supporting the Chinese military's development of a railgun.