Officially, AMD is headquartered in Sunnyvale, California. However, the bulk of the company's activities go down at its Austin, Texas and Markham, Ontario campuses. That makes today's Reuters piece rather surprising. According to the news agency, AMD is going to sell its Austin campus and lease it back in order to free up cash—sort of like a home equity loan, only with big companies and a lot more money involved.
How much money? $150-200 million, according to AMD spokesman Drew Prairie, who says a deal on the 58-acre campus is expected to close in the second quarter of next year. Prairie also gave Reuters the following statement:
"There are favorable economic conditions in the part of Austin where the campus is located," Prairie said. "Contingent on finding an investor who wants to do a multiyear lease-back, it's a good opportunity for us to unlock the value of the real estate to fund operations."
Interestingly, Prairie added that the Sunnyvale headquarters and "a building near Toronto" (presumably in Markham) were also sold and leased back. Reuters doesn't say how much AMD got out of those deals, but if anything, this tells us AMD may well be desperate for cash right now. Considering the company posted yet another loss last quarter and simultaneously announced a 15% workforce cut, that wouldn't be surprising.
Another Reuters story posted earlier this month said AMD hired JPMorgan Chase to "explore options," including a potential sale of some or all of its assets. That time, however, AMD went on record to deny the allegations. "AMD is not actively pursuing a sale of the company or significant assets at this time," the company stated.
Update 11/29 10:36 AM: AMD's Drew Prairie e-mailed us to note that the Markham and Sunnyvale campuses weren't sold recently. "Both transactions occurred several years ago," he wrote. Prairie also added, "This is a fairly common business practice and something we (and many other businesses) have done."
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