AMD (NYSE: AMD) today announced that its Singapore subsidiary, Advanced Micro Devices (Singapore) Pte Ltd. (AMD Singapore), has entered into a conditional put-and-call option agreement to sell and lease-back its Singapore facility located at 508 Chai Chee Lane, Singapore 469032 to HSBC Institutional Trust Services (Singapore) Limited, in its capacity as trustee of Sabana Shari'ah Compliant Industrial Real Estate Investment Trust (Sabana REIT).
The transaction is expected to generate proceeds of approximately 59 million Singapore dollars (USD$46 million), net of all fees, which will be reflected in AMD's third quarter 2013 financial statements when reported on Oct. 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 Corporation (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.
AMD Singapore facility sees sale and lease-back operation
Posted on Friday, Aug 23 2013 @ 14:20 CEST by Thomas De Maesschalck