China-based foundry Semiconductor Manufacturing International Corporation (SMIC) has announced that state-owned Datang Telecom Technology & Industry Holdings will subscribe to US$70 million worth of its preferred shares and warrants.

Datang is already the majority shareholder of SMIC with a 19.07% stake, SMIC said in a statement.

SMIC revealed that under the terms of the agreement, Datang will invest approximately US$58.3 million to acquire 84,956,858 convertible preferred shares at HK$5.39 (US$0.70) per unit, and 16,991,371 warrants at an exercise price of HK$5.39 per warrant.

The deal is subject to the approval of independent shareholders and necessary governmental regulations, SMIC said.

Datang's further investment in SMIC will strengthen the relationship between the two parties, and provide SMIC with additional funding, SMIC indicated.

SMIC previously announced that China Investment Corporation (CIC) would invest US$250 million to acquire about 11.6% of SMIC.

Shanghai Industrial and Taiwan Semiconductor Manufacturing Company (TSMC) and the other two shareholders of SMIC, currently hold 7.82% and 6.53%, respectively.