IQE (LSE:IQE), a leading global supplier of compound semiconductor wafers and advanced materials solutions, will receive a £45m investment from MACOM made up of a £30m equity subscription and £15m secured zero‑coupon convertible loan notes alongside existing shareholder reinvestment, an £11m placing and a retail offer, raising approximately £81m in aggregate.
The proceeds will be used first to repay in full the group's $35m (£27m) revolving credit facility with HSBC, then to redeem the existing loan notes (total redemption cost £23.08m.94) and to strengthen the balance sheet to fund operations and targeted investments in InP and GaN.
Under the deal MACOM will subscribe for 151.52m shares at 19.8p and receive 75.76m warrants, existing noteholders will reinvest £22.77m.75 for 115.01m shares, the placing will raise £11m (≈55.56m shares) and a retail offer up to £2m (≈10.1m shares), implying up to c.332.2m new shares and an enlarged share capital of roughly 1.31bn shares such that the new issuance is approximately 25.4% of enlarged capital and MACOM's holding will be c.11.5%.
The Issue Price of 19.8p represents a c.58.4% discount to the closing mid‑market price of 47.6p on 24 April and c.10.1% below the 12‑month VWAP to that date, the Fundraising is conditional on shareholder approval at a general meeting on 15 May and on UK and Italian foreign investment clearances, is not underwritten, and MACOM will be entitled to appoint two non‑executive directors on completion.
"As a longstanding customer, MACOM believes this transaction will allow IQE to realize its full potential in technology, operational execution and financial performance," Stephen Daly, Chief Executive Officer of MACOM, said.
