Welsh semiconductor manufacturer IQE is looking to raise £18m through the issuance of convertible loan notes to a consortium of existing backers.
The AIM-listed chip firm entered into a subscription agreement with the consortium of IQE investors and senior executives led by its largest shareholder, the Swiss bank Lombard Odier.
The Cardiff-based company said it was seeking short-term liquidity whilst completing its strategic review, which it claimed will “unlock significant unrealised value within the IQE group”.
The loan notes have a conversion price – the value at which the debt can be converted into IQE shares – of 15p, giving the backers a discount of about 10% based on the current share price.
The consortium purchased the loan notes at 85% of their face value, raising aggregate proceeds of £18m.
The notes were secured against IQE’s assets and have been subordinated to the firm’s existing financing facility with HSBC, meaning its debts to the bank will be paid first as a priority.
Other noteholders in the consortium include Artisan Partners, Killik & Co, Bami Bastani and Rodney Pelzel.
“We are pleased a consortium led by our largest shareholder is providing this convertible loan note which demonstrates continued support for IQE and belief in its long-term strategy and significant market opportunity,” said IQE executive chair Mark Cubitt.
“In parallel, IQE continues to make progress on its comprehensive strategic review of its asset base to ensure that it has a strong capital position to further invest in its core operations, with a particular focus on its Taiwan operations, for which all options are being assessed, including a full sale and IPO.”
IQE shares have performed well so far this year, opening 2025 at 11p with the chip firm’s stock having risen by around 55% since then driven by the recently announced partnership to develop commercial quantum dot wafer supply chains for AI optical interconnects with Quintessent.
In its full year results for 2023, the company posted a 31% drop in revenue, with turnover falling to £115.3m but it was able to cut its operating loss from £73m in 2022 to just £25.8m.
IQE’s accounts for the year ended December 2024 are due in June.
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