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HTC said to sell Shanghai phone factory to Chinese firm

HTC said to sell Shanghai phone factory to Chinese firm

Taipei, Aug. 19 (CNA) Taiwan's HTC Corp. is in talks to sell its smartphone manufacturing factory in Shanghai to an unidentified Chinese company to address its mounting financial woes, Taiwanese weekly Next Magazine reported on Wednesday.
HTC set up the 146,667-square-meter factory in the Pudong New Area of Shanghai in 2009 with an initial investment of NT$1.05 billion (US$32.3 million) to cater to the fast-growing smartphone market in China, the magazine reported.
Faced with stiff competition from Chinese manufacturers such as Huawei Technologies Co. and Xiaomi Inc., HTC Chairwoman and CEO Cher Wang has planned to shut down two production lines in Shanghai and discussed the sale of the facility with a Chinese company, the report said.
"Terms of the deal should have been finalized, and the money is expected to be received soon," said an anonymous source familiar with the matter cited by the Chinese-language magazine.
The report said HTC still has inventory of NT$23.5 billion and accounts receivable of NT$28.4 billion -- both considered to be very high -- after losing NT$9.7 per share in the second quarter.
HTC did not confirm the report but reiterated its earlier statement on the company's business realignment, in which it said it would cut 15 percent of its global workforce, or around 2,250 jobs, as part of efforts to reduce its operating costs by 35 percent.
"HTC announced a program of business realignment on Aug. 13 that positions the company for significant profitable growth with a leaner and more agile operating model," the Taoyuan-based company said.
Wang said in the statement last week that as HTC diversifies beyond smartphones, the company needs "a flexible and dynamic organization" to ensure it can take advantage of all of the exciting opportunities in the connected lifestyle space.
"This strategic realignment of our business will ensure that each product group has the right focus, the right resources and the right expertise to win new markets," she said.
Boosted by the Next Magazine report, HTC shares had risen 1.11 percent to NT$50.00 as of 10:59 a.m. Wednesday in Taipei trading. (By Jeffrey Wu)


Updated : 2021-09-19 22:52 GMT+08:00