(By Balaseshan) Advanced Micro Devices Inc. (NYSE: AMD) said it has agreed to sell and lease-back its "Lone Star Campus" located in Austin, Texas to 7171 Southwest Parkway Holdings LP, an affiliate entity of real estate investment company Spear Street Capital.
AMD expects the?sale?to generate about $164 million in cash upon closing.
The company expects to record a special charge of about $50 million in the first quarter of 2013 primarily related to the difference between the sale proceeds and the carrying value of the property.
AMD said the sale?is part of?its strategy to reduce investments and capital in non-core parts of the business, including real estate. AMD employs?roughly 1,900 people in Austin.
At closing, AMD will enter into a 12-year lease with an extension option to continue its operations on the campus. The transaction is expected to close on or about Mar. 26, 2013.
"The sale of our Austin campus will unlock a significant amount of capital, while the multi-year lease back of our Austin campus reconfirms our long-term commitment to the city that so many AMD employees have called home since 1979," said Devinder Kumar, chief financial officer of AMD.
In 1998, the company sold and currently leases-back its headquarters in Sunnyvale, California. In 2008, it sold and currently leases-back its major site in Markham, Ontario, Canada.
Recently, AMD also began marketing the sale of its Building 3 property located at 5900 East Ben White Boulevard in Austin, Texas. Building 3 is a largely unoccupied property whose operations and employees will be consolidated at other AMD sites.
AMD is trading up 0.39% at $2.60 on Tuesday. The stock has been trading between $1.81 and $8.35 for the past 52 weeks.
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