By Janet Levaux
Saturday, February 6th, 2010 at 1:13 pm in Uncategorized.
In one of its latest announcement, UTStarcom — now based on Harbor Bay Parkway — says the company’s headquarters could be relocated to Beijing, China, by March 31.
As goes the global economy and flow of capital, so goes this business — which sells the vast majority of its Internet Protocal and other high-tech products to telecommunications firms and television/entertainment entities in Asia.
Earlier this week, UTStarcom said it entered into agreements with Beijing E-town International Investment and Development Co., Ltd., an investment company established by the Beijing Municipality. The deal includes an investment of $48.5 million by BEIID and two unrelated investment funds, Ram Max Group Limited and Shah Capital Management.
As part of the investment, UTStarcom will issue some 22 million shares of common stock at a price of $2.20 per share, with BEIID investing $25 million, Ram Max Group Limited investing $12.5 million and Shah Capital investing $11 million.
When the transaction closes, Baichuan Du, a former deputy chief engineer of China’s State Administration of Radio, Film and Television, will join the company’s board of directors, along with Xiaoping Li, executive deputy general manager of BEIID, and William Wong, a managing director at Yellowstone Capital.
Li and Wong will replace Allen Lenzmeier and Jeff Clarke, who will resign from UTStarcom’s board of directors at that time. The total number of directors on the board will be increased from six to seven in connection with the transaction.
“We are very pleased to announce this relationship with and commitment from the Beijing Development Area and the investment from Ram Max and Shah Capital,” said UTStarcom CEO and President Peter Blackmore.
“UTStarcom’s growth strategy is in good alignment with the series of guidelines recently issued by China’s State Council to push forward network convergence among telecom, cable television, and internet companies,” Blackmore explained.
In connection with the transaction and UTStarcom’s strategic goals in China, Jack Lu has been appointed the new CEO and president of the company — and he will assume this post either three months after the closing of the investment or on June 30, 2010. Before then, he will be the company’s chief operations officer.
Consistent with its previously announced plans, UTStarcom says it move its headquarters to Beijing, China, as part of an agreement with Beijing Development Area. This shift will take place upon the closing of the investment, which should be by March 31, 2010, according to UTStarcom.