KUALA LUMPUR (June 28): Inari Amertron Bhd is forming a joint venture (JV) with China Fortune-Tech Capital Co Ltd (CFTC) to carry out outsourced semiconductor assembly and test (OSAT) services in China.

In a filing with Bursa Malaysia, Inari said its wholly-owned subsidiary Amertron International Ltd has entered into a JV contract with CFTC (Yiwu) Equity Investment Fund Partnership (Limited Partnership) and CFTC Equity Investment Management (Beijing) Co Ltd.

CFTC (Yiwu) is a private equity fund administered by CFTC, while CFTC Equity is wholly owned by CFTC.

Inari said Amertron International will take up 54.4648% interest in the JV company, called Yiwu Semiconductor International Corporation, while CFTC (Yiwu) will own the remaining 45.5352% stake.

Amertron International will have to contribute RM283.33 million cash into the JV company while CFTC (Yiwu) will inject RM131.78 million of new cash investment, said Inari.

The group said it will fund the RM283 million with proceeds raised from its private placement completed in July last year, which raised RM1.03 billion.

The contract on Tuesday (June 28) came after Inari and CFTC entered into a memorandum of understanding on Oct 18 last year with the intention to set up this JV.

Inari said on Tuesday that the JV will enable it to improve its existing captive business strategy and expand its existing operations in the China market.

“This would enable Inari Group to diversify its product and customer base as well as adding revenue and earning streams with a potential IPO in China at later stages,” it said.

Inari said the JV also represents an opportunity to partner with a strong local technology fund which will help in opening up the China OSAT market for the group.

Inari closed one sen or 0.4% lower at RM2.66, giving it a market capitalisation of RM9.86 billion.