| Item 2.01. | Completion of Acquisition or Disposition of Assets |
On September 1, 2020 (the “Closing Date”), MagnaChip Semiconductor S.A., a Luxembourg société anonyme (“LuxCo”), and MagnaChip Semiconductor, Ltd., a Korean limited liability company (“MSK”), wholly owned subsidiaries of MagnaChip Semiconductor Corporation (the “Company”), completed the previously announced sale of the Company’s Foundry Services Group and the factory in Cheongju (“Fab 4”) to Key Foundry Co., Ltd. (the “Buyer”) in exchange for a purchase price equal to approximately $350.6 million, which included a positive working capital adjustment of approximately $5.9 million, pursuant to the terms of a business transfer agreement (the “Business Transfer Agreement”) dated March 31, 2020 by and among LuxCo, MSK and Magnus Semiconductor, LLC, a Korean limited liability company (“Magnus”). The purchase price was paid in a combination of U.S. Dollars in the amount of $46.5 million and Korean Won in the amount of approximately KRW 360.6 billion. In addition to the purchase price, the Buyer assumed all severance liabilities relating to the transferred employees, which have a value of approximately $100 million. The Buyer is a wholly owned subsidiary of Magnus, which was established by Alchemist Capital Partners Korea Co., Ltd. and Credian Partners, Inc. On April 20, 2020, Magnus assigned, and the Buyer assumed, all rights and obligations of Magnus under the Business Transfer Agreement.
The Business Transfer Agreement and the transactions contemplated thereby, including the sale of the Business, are more fully described in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2020, which description is incorporated herein by reference. Such description and the foregoing description do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Business Transfer Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
| Item 7.01. | Regulation FD Disclosure |
On September 1, 2020, the Company issued a press release announcing the closing of the sale of the Business, as discussed in Item 2.01 above, the text of which is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information furnished pursuant to this Item 7.01, including the attached press release, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing by the Company with the SEC.
On September 2, 2020, the Company issued a notice of full redemption to the holders of its 6.625% Senior Notes due 2021 (the “2021 Notes”) for the redemption in full of all of its outstanding $224.25 million aggregate principal amount of the 2021 Notes on October 2, 2020 (the “Redemption Date”) at a redemption price equal to the sum of 100% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.
| Item 9.01. | Financial Statements and Exhibits |
| (b) | Pro forma financial information |
The pro forma financial information of the Company as adjusted to give effect to the sale of the Business is presented in the unaudited pro forma consolidated financial statements filed as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.
The following exhibit is furnished as part of this report:
| * | The schedules and exhibits to the agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the SEC upon request. |
