(Adds deal price, stock. Figures in U.S. dollars unless
OTTAWA Feb 29 Canadian chip maker Zarlink
Semiconductor Inc ZL.TO said on Friday that it has sold its
money-losing analog foundry in the United Kingdom to a MHS
Industries Group subsidiary for 1 euro.
Zarlink said it expects to record a book loss of about $13
million, or 10 cents per share, as a result of the sale. It
also lowered its fourth-quarter forecast to a loss of between
16 cents and 18 cents per share from a loss of between 6 cents
and 8 cents per share.
Due to the timing of the deal closing, Zarlink is
maintaining its fourth-quarter revenue guidance of between $53
million and $56 million.
The company said it has paid MHS Electronics 2 million euro
for restructuring under the deal, which will be accretive to
Zarlink's fiscal 2009 earnings by about 5 cents per share. The
earnings gain largely reflects the elimination of foundry
losses in 2008, Zarlink said.
Under the arrangement, Ottawa-based Zarlink will transfer
all assets including equipment, about 120 staff, and inventory
to MHS Electronics, but exclude cash on hand and accounts
payable and receivable.
Under a three-year agreement to ensure continued wafer
supply, Zarlink will deposit $3.9 million for about nine months
of product orders.
Shares in Zarlink added 4.6 percent, or 4 Canadian cents,
to 91 Canadian cents on the Toronto Stock Exchange after the
news. So far this year, the stock has gained about 15 percent.
(Reporting by Susan Taylor; Editing by Renato Andrade)