HTC sells Taoyuan plant to Inventec

CENTRALIZATION::Inventec said it expects the transaction to complete in March and it expects to transfer its server business to the building in the second quarter of next year

By Lauly Li  /  Staff reporter

Wed, Dec 30, 2015 - Page 13

HTC Corp (宏達電) yesterday said it is to sell a plot of land and a building in Taoyuan to Inventec Corp (英業達) for NT$6.06 billion (US$183.46 million) as part of its efforts to lower operational costs and boost efficiency.

The local smartphone maker said the production facilities and its employees would be transferred to HTC’s three other properties in Taoyuan to centralize its production facilities.

“The sale of the land and building will not affect HTC’s production capacity or shipping schedules,” an HTC investor relations officer said by telephone.

The officer said the transaction also has no implications for HTC’s operations or headcount.

After deducting transaction costs and tax payments, the firm is to book a NT$2.1 billion non-operating gain from the sale of the land and the building, the smartphone company said.

“A non-operating gain of NT$2.1 billion is to be booked in the first quarter of next year,” the officer said.

When asked whether HTC has plans to sell other assets to continue to cut its operating costs, the company said it would review all the possibilities based on its operational needs.

The smartphone maker reported a net loss of NT$12.56 billion in the first three quarters of this year, a significant decline from a net profit of NT$1.01 billion in the same period last year.

That represented a loss per share of NT$14.68 from January to September, compared with earnings per share of NT$1.23 last year.

In the quarter ending Sept. 30, HTC had NT$43.3 billion in cash and cash equivalents, its balance sheet showed.

In an attempt to meet the expanding scale of its server business, Inventec said its board of directors approved the NT$6.06 billion purchase of the land and building from HTC.

“The building will be used as the main office of Inventec’s server business,” an Inventec investor relations officer said by telephone.

The officer said Inventec’s server business is based in two offices in Taoyuan and the purchase of the building from HTC would help the company centralize the management of its server business.

The officer said the firm also plans to set up a research and development center for the server business in the building.

Inventec said it expects the transaction to complete in March next year and it expects to transfer the server business and its employees to the building in the second quarter of next year.

The NT$6.06 billion transaction costs would be booked in the first quarter of next year, the firm said.

After moving the server business to the new building, the remaining offices in Taoyuan would be used for Inventec’s solar business, the officer said.

HTC shares rose 0.63 percent to close at NT$79.5 in Taipei trading yesterday, while Inventec shares remained unchanged at NT$21.9. The TAIEX lost 0.77 percent.