LONDON Nonvolatile memeory maker Spansion Inc. (Sunnyvale, Calif.) has announced its wholly owned subsidiary Spansion LLC has agreed to sell its final manufacturing facility located in Suzhou, China and related equipment to Powertech Technology Inc. (Hsinchu, Taiwan) for $31 million in cash.
Under the terms of the agreement and subject to U.S. bankruptcy court approval, Powertech will pay Spansion LLC approximately $31 million in cash, subject to certain adjustments, over the six months following the closing and Spansion LLC will transfer 100 percent of its shares in its subsidiary Spansion Holdings (Singapore) Pte. Ltd., the holding company of the Suzhou facility.
Powertech has agreed to provide final manufacturing services to Spansion at the Suzhou facility.
The move is part of restructuring efforts designed to bring Spansion out of Chapter 11 bankruptcy protection.
"As an industry-leading final assembly and test service company, we believe PTI is an ideal final manufacturing resource for Spansion," said John Kispert, Spansion president and CEO, in a statement. "We believe this agreement will help Spansion emerge from the Chapter 11 process a stronger and more focused company."
The Spansion Suzhou facility has approximately 565 employees and is one of four factories in Spansion's final manufacturing network. The facility has been operaring since 1998 and capabilities include: multi-chip-package (MCP) development; high-volume manufacturing of MCP, FBGA, and TSOP packages; assembly, test, mark and pack; and customer support.
"We expect an uninterrupted supply of products to our customers after the transfer of ownership of the Suzhou facility," said Ajit Manocha, executive vice president of operations, in the same statement.
The transaction and its final terms are subject to U.S. bankruptcy court approval.