TMCnet News
China Mobile Phone Tycoon Rumored to Invest in UTStarcomBEIJING, Jun 05, 2009 (SinoCast Daily Business Beat via COMTEX) -- UTStarcom, Inc. (Nasdaq: UTSI) is said to clinch its plan for bringing in a new investor soon by offering new shares. The company reached a preliminary agreement with a Chinese mobile phone mogul, a person close to the deal disclosed on June 3, adding that the two parties will be likely to ink a final agreement in the US several days later. Upon the accomplishment of the proposed share sale, the Chinese tycoon will be the first-largest shareholder of UTStarcom, said the insider. Softbank Corporation, the first-largest shareholder of UTStarcom at the moment, takes an 11.45% stake in the Nasdaq-listed company. In addition, UTStarcom plans to slash nearly 2,000 jobs before introducing the new investor. On May 7, the company released its financial report for the first quarter of 2009. Its net loss for Q1 2009 amounted to USD 67.4 million, compared with a net profit of USD 25.4 million in Q1 2008. Diluted loss per share stood at USD 0.54, compared with diluted earnings per share of USD 0.21 in the period last year. GAAP net sales plunged to USD 119 million from USD 586 million in Q1 2008. Such a sharp decrease reflected the disposal of its personal communications division (PCD) and withdrawal from the non-core business. On July 1, 2008, UTStarcom sold out PCD, a unit that used to contribute greatly to its total revenues. On December 18, 2008, the company announced its plan to scale down its mobile phone manufacturing operation in South Korea. Gross profit margin climbed to 18.1% in January-March 2009, compared with 15.7% in Q1 2008. Operating loss swelled from USD 31 million a year ago to USD 59 million. As of March 31, 2009, the company's net cash, cash equivalents, and short-term investments had totaled USD 301 million, in contrast to USD 314 million at the end of 2008. Headquartered in the US, UTStarcom is an IP-based communications products and services provider. Its products mainly include Internet protocol TV (IPTV), next generation network, and broadband solutions. It has R&D centers in the US, Canada, China, and India. In spite of the less-than-expected revenues, UTStarcom still keeps its force in the communications market, noted analysts. The company is in connection with a number of telecom carriers in the world. Particularly, it has certain advantages in the IPTV market, explained the person in the know. Source: www.caijing.com.cn (June 05, 2009) |