Magnachip has decided to separate its display and power businesses into distinct entities. The primary goal of this decision is to enhance transparency, accountability, and flexibility in its operations. The company believes that by creating distinct entities, it will allow shareholders and investors to better understand the performance and financial contributions of each separate business.
Magnachip plans to initiate an internal split-off, which involves creating a new subsidiary (referred to as “NewCo”) under Magnachip Semiconductor, Ltd., their operating subsidiary (often referred to as “Magnachip Korea”). As part of this transaction, all assets and liabilities of the display business will be transferred to this new subsidiary, NewCo, in exchange for equity in the new company.
Once the split-off is complete, Magnachip Korea and NewCo will function as separate operating companies, with the latter being a wholly owned subsidiary of the former. This means that while both companies will operate independently, they’ll both still be fully owned by the larger Magnachip entity. Magnachip’s Gumi fabrication facility will remain with Magnachip Korea as part of its power business.
Magnachip’s current board of directors will continue to oversee both entities, ensuring a uniform governance across the separate businesses. YJ Kim and the executive management team will continue to manage their respective businesses and operations. The separation process is expected to be completed in the fourth quarter of 2023.
