by Anton Shilov
08/22/2013 | 08:59 PM
Advanced Micro Devices on Thursday announced that its Singapore subsidiary, has entered into a conditional put-and-call option agreement to sell and lease-back its Singapore facility to Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana REIT). The move will bring AMD much-needed cash, but will leave the company without a facility.
The transaction is expected to generate proceeds of approximately 59 million Singapore dollars ($46 million), net of all fees, which will be reflected in AMD’s third quarter 2013 financial statements when reported on October 17, 2013. AMD expects to record a gain of approximately $16 million in the third quarter of 2013. AMD Singapore will continue its operations in a portion of the Singapore facility and has negotiated a 10-year sub-lease agreement with Sabana REIT with extension options to continue those operations. The sub-lease would be effective upon the close of the sale of the property.
Prior to transaction close, AMD Singapore needs to secure final approval from the JTC Corp. (JTC), the Singapore entity tasked with managing the country’s industrial infrastructure. The company anticipates securing all required approvals from the JTC as part of closing the transaction.
The sale of AMD’s Singapore facility is in keeping with AMD’s strategy to reduce investments and capital in non-core parts of the business, including real estate. AMD launched operations in Singapore in 1984 and remains committed to the site as a vital part of the company’s global operations. In 2012, AMD Singapore completed its transformation from a high-volume manufacturing site to an engineering center of excellence and currently employs approximately 500 people.