AXT Inc. largely completes second tranche of PE investment in China

AXT announced that the second tranche of the private equity investment in its wafer manufacturing company in China, Beijing Tongmei Xtal Technology, was largely completed in December 2020. The second tranche investment was originally scheduled to fund in January 2021. In December, seven private equity firms invested approximately $25M in the second tranche. An additional $1.5M is expected to be invested in January 2021, closing the second tranche at approximately $26.5M. The first tranche, totaling approximately $22.5M, funded in November 2020. Upon the completion of the final $1.5M investment, the capital raise will total approximately $49M in exchange for an approximately 7.28 percent minority interest in Tongmei. AXT previously announced on November 16, 2020 a strategic plan to access China's capital markets and progress to an initial public offering by Tongmei on the Shanghai Stock Exchange's Sci-Tech innovAtion boaRd. To qualify for a STAR Market listing, Tongmei is required to have multiple independent shareholders. The first major step in this process is engaging reputable private equity firms in China to invest funds in Tongmei. The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Tongmei does not expect to accomplish this goal until mid-2022. AXT has posted on its website a brief summary of the plan and the process. The listing of Tongmei on China's STAR Market will not change the status of AXT, Inc. as a U.S. public company headquartered in Fremont, California. It will continue to be listed on the Nasdaq Global Select Market under the symbol AXTI.