SAN JOSE -- India's Teamasia Semiconductor Pte. Ltd. said it plans to take majority ownership of IMP Inc. here, which has fallen on hard times due to slipping revenues and climbing expenses. IMP's cash position has deteriorated, and it has defaulted on some of its credit, according to company officials.
Consequently, Teamasia has agreed to come to the rescue with an additional equity investment of $5.98 million in cash for 5.5 million shares of IMP. The transaction comes nearly two months after Teamasia agreed to take a 16.7% stake in the analog chip maker, which is providing silicon foundry services under that arrangement (see Oct. 26 story).
The new agreement must be approved by IMP shareholders, and it is expected to close in the first quarter of next year. Teamasia said its holdings in IMP could eventually decrease to about 51% after dilution for warrants, and employee stock-option and stock-purchase plans.
The additional investment by Teamasia, major cost cuts and negotiations with creditors are expected to improve IMP's cash position, said company managers. "Teamasia's additional capital has been vital to the continuation of IMP's core business, and we are already working with them to realize the other important benefits of this relationship for IMP," said Zvi Grinfas, chief executive officer and chairman of IMP.
Teamasia, a supplier of discrete semiconductors, expects to expand its offering to analog products in India and the Asia-Pacific market as a result of its growing relationship with IMP. "This transaction offers synergies that will enhance the value of both IMP and Teamasia," explained Subbarao Pinamaneni, managing director of Teamasia, based in Patancheru, India.
"Teamasia will have access to additional wafer-fabrication capacity and design technology at IMP," said Pinamaneni, who was named to IMP's board of directors. "IMP will have access to Asian markets where it is presently inactive, and it can take advantage of low costs in India for design, testing and packaging."
In addition to Pinamaneni, a second representative from Teamasia will sit on IMP's board.