UTStarcom sells Hangzhou plant for €93m

US-China vendor UTStarcom will sell its lavish Hangzhou factory for 950 yuan (€92  million), the company has announced.
Local construction and engineering firm, the Zhejiang Zhongnan Group, will acquire the 2.6 million square feet manufacturing plant, the R&D facility and office buildings.
The transaction is expected to close by the end of the first quarter of 2010, UTStarcom said.
Zhongnan will pay a deposit of 50 million yuan for the facility.
UTStarcom will lease back a portion of the massive plant, which it built in Hangzhou’s technology district in the early part of the decade as it rode the boom for Xiaolingtong PHS gear and the rising demand for DSLAMs and handsets.
The collapse of the PHS market and intense competition in its other segments took the company to the brink. It has since restructured, closing its manufacturing operation and selling off its device business.
It said it expected to record an impairment charge in its fourth quarter financial statement as a result of the sale.
CEO Peter Blackmore said the transaction showed the company was meeting its commitment to “monetize our underutilized facility in Hangzhou.”
The privately-held Zhongnan Group says annual sales are more than 5 billion yuan. Among its assets is Singapore-based animation house Chinanimax