(Yicai) Sept. 1 -- Chinese semiconductor and electronics company Wingtech Technology has secured a court freeze on billions of yuan of Nexperia’s assets in China, gaining fresh leverage in its fight with the Dutch chipmaker after losing control of the business dealt a severe blow to its finances.

The Intermediate People’s Court of Dongguan froze CNY2.1 billion (USD300 million) of assets belonging to Nexperia and semiconductor equipment unit ITEC after Wingtech sought property preservation as part of a CNY8 billion lawsuit, Wingtech announced yesterday.

The court also froze Nexperia and ITEC’s equity interests in Chinese subsidiaries, including Nexperia’s 100 percent stake in Nexperia Semiconductor China.

Nexperia, which traces its origins to the semiconductor business of Dutch electronics giant Philips, became a pillar business of Wingtech after the Chinese company spent more than CNY30 billion (USD4.5 billion) to fully acquire it between 2018 and 2020.

The control dispute began in the second half of last year and escalated in September, when the Dutch government invoked the Goods Availability Act over governance concerns and risks to European security of supply. The government suspended the order in November. 

Separately, the Enterprise Chamber of the Amsterdam Court of Appeal suspended Wingtech’s actual controller Zhang Xuezheng as a Nexperia director last October and placed substantially all voting rights attached to Wingtech’s Nexperia shares under independent administration. Those measures remain in effect.

Wingtech responded by suing Nexperia and its management in Dongguan in May, alleging that their discriminatory actions caused huge losses to the Chinese company. It is demanding CNY8 billion in compensation and the restoration of its control over Nexperia. The lawsuit has yet to go to trial.

Financial Toll

The loss of control over Nexperia has taken a heavy financial toll on Wingtech. The Chinese company reported a net loss of CNY8.7 billion last year amid losses stemming from the Nexperia dispute, while revenue plunged 58 percent from the previous year to CNY31.3 billion.

The deterioration continued in the first half of this year, when Wingtech recorded a net loss of CNY406 million (USD60.4 million), and revenue tumbled 94 percent from a year earlier to CNY1.5 billion.

Despite the fresh court development, Wingtech's shares [SHA: 600745] fell 3.1 percent to CNY18.53 (USD2.80) today and have slumped over 50 percent so far this year.

Editors: Dou Shicong, Emmi Laine