Xiaomi’s subsidiaries, Kingsoft to jointly set up fund for IC investment

Shanghai (Gasgoo)- Kingsoft Corporation Limited (“Kingsoft”), a China-based and HK-listed leading software and Internet services company, announced on Mar. 2 that Kingsoft Wuhan (a subsidiary of Kingsoft), Xiaomi Beijing, Xiaomi Wuhan and the other investors entered into an agreement to form a fund with an expected subscription contribution amount of 10 billion yuan ($1.449 billion).

The said fund will be mainly engaged in the equity investment or quasi-equity investment (directly or indirectly), or carrying out investment-related activities, in unlisted companies that primarily focuses on the ICs (integrated circuits), and the related upstream and downstream fields, which cover new generation information technology, intelligent manufacturing, new materials, artificial intelligence, display and display devices, automotive electronics, as well as upstream and downstream applications and supply chains regarding consumer mobile terminals and smart devices.

Under the agreement, Kingsoft Wuhan shall take part in the fund as a limited partner and agreed to make a contribution in the amount of 500 million ($72.427 million). Xiaomi Beijing will act as a general partner, while Xiaomi Wuhan and the other investors will serve as other limited partners.

Photo credit: Xiaomi

Both Xiaomi Beijing and Xiaomi Wuhan are subsidiaries of Xiaomi Group, which is an associate of Mr. Jun Lei, a director and substantial shareholder of Kingsoft. Mr. Jun Lei holds a majority of voting power in Xiaomi, while other interests of Xiaomi are held by independent third parties. As such, each of Xiaomi Beijing and Xiaomi Wuhan constitutes an associate of Xiaomi and is a connected person of Kingsoft.

Xiaomi Beijing and Xiaomi Wuhan agreed to subscribe for 30 million ($4.346 million) and 3 billion yuan ($434.562 million) to the fund, representing a 0.33% and 33.22% partnership interest, respectively.