Labat Africa has confirmed its majority shareholder will sell out of the business, as Labat's only operating entity is running at a loss.
Link, Labat's majority shareholder, will sell its 45.7% stake - at 5c a share - to Aurora. In addition, Link will acquire an agreement to sell, from shareholders owning 21.3% of Labat, to Aurora.
The decision to sell the company is based on the fact that Labat's only operating entity, South African Micro Electronic Systems (Sames), has been running at a loss for several years.
Sames is the only commercial semiconductor manufacturing facility in Africa. It is an integrated operation, undertaking the design, manufacture and marketing of high-performance analogue and mixed signal integrated circuits.
The company is not likely to become profitable in the short term. As a result, the board has decided to cease wafer production, at Koedespoort, and move manufacturing to a plant in China. It will look for alternative uses for the existing plant and premises.
Labat says the premises lend themselves to a variety of alternative uses, including the establishment of a pharmaceutical and medical diagnostic manufacturing facility.
However, finding an alternative for the property will take some time and would be best done in an unlisted environment, it notes.
Shareholders will be given the option of reinvesting in Sames, and have to approve the deal before it can go ahead.
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Labat shareholder to sell out
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