UTStarcom agrees to sell Chinese building to Zhongnan Group of Companies for $140M

UTStarcom agrees to sell Chinese facility

ALAMEDA, Calif. — UTStarcom Inc., which makes telecommunications equipment, said Monday that it agreed to sell a building in Hangzhou, China, to the Zhongnan Group of Companies for 950 million yuan ($140 million).

UTStarcom shares jumped 20 cents, or 10.4 percent, to $2.12 in afternoon trading.

After taxes, UTStarcom will get 900 million yuan ($132 million). The agreement is expected to close before the end of march.

The facility includes 2.6 million square feet of manufacturing operations, research and development and administrative offices, along with some related assets, UTStarcom said.

According to the agreement, Zhongnan Group of Companies will pay a 50 million yuan ($7.3 million) deposit to UTStarcom three days after signing for the property. UTStarcom will keep some operations in Hangzhou by leasing back part of the building.

The company said it plans to report a fourth-quarter impairment charge due to the sale agreement.