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Chip designer Imagination Technologies has announced plans to sell two of its businesses in a desperate effort to raise cash after Apple, its biggest customer, said last month that it would no longer use the UK chip designer’s technology in new products.

The Hertfordshire-based company said it planned to dispose of its MIPS and Ensigma divisions in order to “strengthen Imagination’s balance sheet.”

The Mips business, which was acquired for £60m in 2012, designs microprocessors found in Wi-Fi routers, mobile phones and tablets. It is also being marketed for use in automated cars, via collaborations with driver assistance technology company Mobileye and several car companies.

Ensigma offers IP licensing for connectivity in low power devices such as internet of things gadgets. Revenues from this area more than doubled in the six months to October.

Imagination is hunting for a cash boost after Apple announced it would design its own graphics chips for future iPhones and iPads, and reduce its reliance on the British company over the next 15 to 24 months. It says it has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and intellectual property rights.

Apple accounts for roughly half of Imagination’s annual revenues, and is one of its largest shareholders, with a 9.5 per cent stake in the company.

Last September, the group offloaded its Pure digital radio division for £2.6m.

Imagination also announced on Wednesday that it had been “unable to make satisfactory progress with Apple to date” regarding finding alternative commercial arrangements for the current license and royalty agreements, and that it had therefore commenced a dispute resolution procedure.

The goal, it said, was to reach “an agreement through a more structured process.”

Copyright The Financial Times Limited 2018. All rights reserved.

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