Technology firm 'sees no issue' with shareholder agreement over Compound Photonics microelectronics plant

Kaiam Corporation says its approach for Compound Photonics’ base in Newton Aycliffe, County Durham, remains on track.

The reassurance came after a source close to Compound told The Northern Echo the agreement could be scuppered by potential shareholder conflict.

According to the group’s latest financial results, and under a section titled going concern, majority shareholders signed a subscription agreement for 23.5 million shares for $36m to support the company’s short-term growth, providing it abided by an agreed business plan.

Officials said the move was taken since income from existing sales and monies would fall short in taking the firm to a positive cash position.

However, speaking from Kaiam’s US headquarters, Art Stein, chief finance officer, played down any impact.

He told the Echo: “The majority shareholders approved the Compound deal, so I do not think it is an issue.”

The Echo last month exclusively revealed Kaiam’s approach for Compound’s plant, which the business says will allow it to continue making transceivers that help transmit and receive data that is uploaded to the internet and stored in data centres.

It is not yet known how many jobs Kaiam hopes to create at Aycliffe.

Compound took on the Aycliffe plant from RFMD in 2013, when that company took work back to the US but Brian Bolger, chief financial officer, said its focus has changed.

He added: “The company no longer needed an in-house laser facility at Aycliffe. As part of the transaction, Compound is investing in Kaiam to become a significant shareholder.”

The plant was classed as the world’s most advanced microchip factory when it was officially opened for Fujitsu by the Queen in 1991.

However, the building closed when the Japanese technology firm buckled under a worldwide collapse in memory chip prices. It was subsequently bought by Filtronic, before being taken on by RFMD a decade ago.