ICBC contributes to a $480 million USD syndicated loan to finance Uphill Investment's acquisition of Integrated Silicon Solution, Inc. (Linked to Record ID#105861 and #105879)

Project narrative

In mid-November 2015, a three-bank syndicate — the Industrial and Commercial Bank of China (ICBC) as mandated lead arranger and bookrunner and the Bank of Beijing Co., Ltd. (BOB) and Beijing Rural Commercial Bank Co., Ltd. (BJRCB) as participants — entered into a $480 million USD syndicated loan agreement with Uphill Investment Co. — a China-incorporated special purpose vehicle and joint venture of Summitview Capital (Pujiang), an investment managed by SummitView Capital Management Limited (Wu Yuefeng Capital), a Chinese venture capital and investment management company, Beijing Integrated Circuit Design and Test Fund, a private equity fund managed by Hua Capital Management Co., Ltd, a private equity fund focused on semiconductor investments established by Tsinghua Holdings and China FortuneTech Capital, a fund under the Semiconductor Manufacturing International Corporation (SMIC), eTown MemTek Ltd., a Chinese fabless company researching and developing advanced memory technology and products majority owned by Beijing municipal government-owned Beijing E-Town International Investment & Development Co., Ltd., and Huaqing Jiye Investment Management Co., Ltd., a Chinese investment company majority-owned by Tus-Holdings Co., Ltd. — to finance Uphill Investment's acquisition of American semiconductor manufacturer Integrated Silicon Solution, Inc. (ISSI). This loan carried a maturity period of five years and a grace period of 2.5 years, with 15% of the outstanding balance due 30 months after the withdrawal date, 15% due 36 months after the withdrawal date, 15% due 42 months from the withdrawal, 15% due 48 months from the withdrawal date, 15% due 54 months from the withdrawal date, and the final 25% due 60 months from the withdrawal date. This loan was guaranteed by Beijing E-Town International Investment & Development Co., Ltd. The loan was withdrawn on November 30, 2015. Record ID#105860 captures ICBC's contribution. Record ID#105861 captures BJRCB's contribution. On November 20, 2015, Beijing E-Town International Investment and Development Co., Ltd. issued a RMB 247 million ($39 million USD) loan to Huaqing Jiye Investment Management for the acquisition of ISSI. This loan carried a maturity period of two years. Record ID#105879 captures E-Town's loan. ISSI is a fabless semiconductor company based in Silicon Valley, in Milpitas, California that designs and markets high performance integrated circuits for the automotive, communications, industrial, and digital consumer market. Its primary products are high speed and low power SRAM and low, and medium and high density DRAM. Its also designs and markets NOR flash products and high performance analog and mixed signal integrated circuits. ISSI has offices Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and South Korea. On February 17, 2015, in a meeting between Uphill Investment Co. and ICBC, ICBC indicated that it would provide debt financing for the acquisition. On February 20, 2015, representatives of financial advisor Needham & Company, LLC delivered to ISSI an executed debt commitment letter from ICBC for a $350 million USD loan for the purchase price with an offer letter indicating that Uphill would be willing to acquire ISSI at an all-cash price of $19.00 ISD per share. ISSI counterproposed, and Uphill responded with a revised cash offer of $19.15 USD on February 27, 2015, upping its offer to $19.25 USD on February 28, 2015. Then, on March 1, 2015, Uphill and ISSI executed a letter for this deal. On March 11, 2015, the board of ISSI unanimously approved the merger for its shareholder. On March 12, 2015, the merger agreement were executed and delivered. The acquisition was expected to close in the third quarter of 2015. Then, on May 13, 2015, American semiconductor manufacturer Cypress Semiconductor Corporation made an unsolicited non-binding offer to acquire ISSI for $19.75 USD per share in cash. In response, Uphill raised its purchase price from $19.25 USD per share to $20.00 USD. On May 29, 2015, it signed a merger agreement with ISSI. Then on May 29, 2015, Cypress raised its offer to $20.25 USD; on June 10, 2015, ISSI agreed to Cypress's terms, but on June 11, 2015, Uphill raised the price to $21.00 USD per share, and a merger agreement was signed on June 11, 2015. Further bidding occurred, with the winning bid by Uphill being $23 USD per share, a purchase price of $765 million USD. The acquisition was completed on December 7, 2015 with ISSI's delisting from NASDAQ. This was the first ever acquisition where Chinese capital successfully privatized a U.S.-based listed company in the semiconductor design field and was seen as an example of the increased internationalization of China's integrated circuit investment capital. The acquisition was also specifically seen as benefiting China’s memory storage industry, advancing its automotive semiconductors, and helping protect security of its domestically produced smart cards.