AMD Announces Proposed Sale and Lease-back of AMD Singapore Facility to Sabana Shari’ah Compliant Industrial Real Estate Investment Trust
SUNNYVALE, Calif. —8/22/2013
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 (NYSE: AMD) designs and integrates technology that powers millions of intelligent devices, including personal computers, tablets, game consoles and cloud servers that define the new era of surround computing. AMD solutions enable people everywhere to realize the full potential of their favorite devices and applications to push the boundaries of what is possible. For more information, visit www.amd.com.
This document contains forward-looking statements concerning AMD, the consummation of a sale-leaseback transaction, the expected cash generated from the transaction, securing required approvals from the JTC, the expected gain from the transaction and AMD’s strategy to reduce investments and capital in non-core parts of the business, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "believes, "expects," "may," "will," "should," "seeks," "intends," "pro forma," "estimates," "anticipates," "plans," "projects," and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corp.'s pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities may negatively impact the company’s plans, that the company will require additional funding and may be unable to raise sufficient capital on favorable terms, or at all; that customers stop buying the company’s products or materially reduce their operations or demand for the company’s products; that the company may be unable to develop, launch and ramp new products and technologies in the volumes that are required by the market at mature yields on a timely basis; that the company’s third party foundry suppliers will be unable to transition the company’s products to advanced manufacturing process technologies in a timely and effective way or to manufacture the company’s products on a timely basis in sufficient quantities and using competitive process technologies; that the company will be unable to obtain sufficient manufacturing capacity or components to meet demand for its products or will not fully utilize its projected manufacturing capacity needs at GLOBALFOUNDRIES (GF) microprocessor manufacturing facilities; that the company’s requirements for wafers will be less than the fixed number of wafers that it agreed to purchase from GF or GF encounters problems that significantly reduce the number of functional die it receives from each wafer; that the company is unable to successfully implement its long-term business strategy; that the company inaccurately estimates the quantity or type of products that its customers will want in the future or will ultimately end up purchasing, resulting in excess or obsolete inventory; that the company is unable to manage the risks related to the use of its third-party distributors and add-in-board (AIB) partners or offer the appropriate incentives to focus them on the sale of the company’s products; that the company may be unable to maintain the level of investment in research and development that is required to remain competitive; that there may be unexpected variations in market growth and demand for the company’s products and technologies in light of the product mix that it may have available at any particular time; that global business and economic conditions, including PC market conditions, will not improve or will worsen; that demand for computers will be lower than currently expected; and the effect of political or economic instability, domestically or internationally, on the company’s sales or supply chain. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Quarterly Report on Form 10-Q for the quarter ended June 29, 2013.
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