Hua Hong Grace Semiconductor (HKG:1347, SHA:688347) received approval from the China Securities Regulatory Commission to issue shares to acquire 97.5% of Shanghai Huali Microelectronics, according to a Hong Kong bourse filing on Wednesday.
The company's Shanghai shares surged 7%, while its Hong Kong shares jumped nearly 6% late Thursday morning.
To fund the acquisition, Hua Hong will issue 190,768,392 new A-shares at 43.34 yuan per share to four selling institutional investors, including its parent entity, Huahong Group.
The issuance represents 9.89% of the company's enlarged A-share capital. In line with the asset purchase, the board has approved a separate private placement to raise up to 7.56 billion yuan in matching funds to support the integrated entity's future capital requirements.