Taiwan's Ministry of Economic Affairs (MOEA) on October 29 approved the conversion of China-based LED epitaxial wafer and chip maker Sanan Optoelectronics' 19.9% stake in Taiwan-based Formosa Epitaxy into a 3.1% stake in Epistar, with the following strings attached: Sanan cannot transfer patents and technologies from Epistar, be involved in operations at Epistar nor recruit Epistar's employees, according to MOEA.
If Sanan violates the conditions, it will be asked to release its investment in Epistar, MOEA indicated.
Sanan subscribed to 120 million new shares issued by Formosa Epitaxy for private placement at NT$19.60 (US$0.65) per share in August 2013. The investment totaled NT$2.352 billion for a 19.9% stake.
Epistar and Formosa Epitaxy, in late June 2014, jointly announced that the latter will become a wholly-owned subsidiary of the former through a stock swap of one Epistar share for 3.448 Formosa Epitaxy shares. Through the stock swap, Sanan's 19.9% stake in Formosa Epitaxy would convert into a 3.1% stake in Epistar, subject to MOEA approval.
