Advanced Micro Devices, Inc (NYSE:AMD) advances with Singapore subsidiary sale
Advanced Micro Devices, Inc (NYSE:AMD) has now signed one conditional put and call option-agreement to sell-off Advanced Micro Devices (Singapore) Pte, its subsidiary in Singapore. This will help the company in generating funds and also in diversifying outside the realm of the declining PC industry. AMD will be selling the subsidiary to HSBC Institutional Trust Services (Singapore) Limited.
This transaction will be closed once the final approval has been received from the JTC Corporation. This is the entity in Singapore that is manages the industrial infrastructure in the country. Post this deal, AMD will enter into a ten year sub-lease, via which it will continue operations in a segment of the facility.
Once the deal has been completed, Advanced Micro Devices projects that it will generate around $46M (59M Singapore dollars). In the Q3, the company is expected to record a gain of around $16M. The proceeds from the sale will mostly reflect in the company’s 2013 Q3 fiscal results which are slated to be reported on 17 October 2013.
This sale is one more effort by AMD to chop its capital and investments in the non-core parts of its business, including real-estate. In March, the company stated that it has signed one agreement to divest its Austin campus for around $164M in cash. AMD is the 2nd largest microprocessor maker in the world.
In its last-reported quarter the company’s top line numbers had exceeded its guidance. This had been attributed to strong mobile-design wins and new products. The company’s bottom-line had also beat Zack’s consensus estimate.
Moving into the game console space
Smartphones, tablets as well as various other mobile devices are infiltrating the market like never before and have led to stagnation in global PC sales. AMD has thus transitioned and started providing chips that are used in game-consoles. This will help the company’ reduce its dependence on the dipping PC market.