Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM), which trades as TowerJazz, has agreed to sell its holdings in Chinese foundry Hua Hong Semiconductor Limited (HHSL), in a buy-back deal by HHSL, for $32 million in cash.
Tower holds 10% of HHSL’S shares, with a GAAP value of $17 million on Tower's balance sheet.
Tower Semiconductor CEO Russell Ellwanger said, "This transaction is another step in our business growth strategy, providing us with additional cash which may enable us to fund our continued growth initiatives. Our relationship and supply agreement with HHSL and its wholly owned subsidiary HHNEC are independent of an equity position.”
Tower Semiconductor said that the deal would be closed in the third quarter of 2011.
Tower Semiconductor's share price closed at $1.15 on Nasdaq yesterday, giving a market cap of $311.13 million. The company's share price was up 1.51% in afternoon trading on the TASE to NIS 3.91.
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