Motorola to spin off chip unit
Published: 18 Dec 2003 16:10 GMT
Motorola's chipmaking unit, temporarily named SPS Spinco, plans to sell up to $2bn (£1.14bn) in stock during an initial public offering, according to a filing made Wednesday with the US Securities and Exchange Commission.
The stock offering, underwritten by The Goldman Sachs Group, is expected sometime next year. The filing didn't divulge the price per share or give a specific offering date.
Motorola will continue to own a portion of SPS Spinco until 2005, when it will dissolve the financial relationship, according to the filing. Spinco plans to change its name in the next few months. A Motorola spokeswoman had no comment on Wednesday.
The filing also details how Spinco, like many in the semiconductor sector, underwent a financially painful three years of slowing sales brought on by what the company describes as an "abrupt decline" in the demand for cellphones and other digital devices.
Spinco suffered "sizable net losses" of $2.2bn in 2001, $1.8bn in 2002 and another $400m during the first nine months of 2003, according to the filing. As a result, the company cut 11,000 jobs and shuttered a dozen manufacturing facilities. "We believe that we are well positioned to improve our financial results," Spinco said in the filing.
Motorola has committed to buying most of the cellphone chips it needs through 2006 from Spinco, according to the filing. Spinco's cell chips do not use the Code Division Multiple Access standard, which is popular in North America, Latin America and Korea.
The filing comes a day after Motorola announced that former Sun Microsystems president Ed Zander will be its next chairman and chief executive officer. Elected unanimously by Motorola's board of directors, Zander will take the helm on 5 January, replacing Christopher Galvin, whose grandfather founded the company.
Did you find this article useful?
42 out of 63 people found this useful
Digg
Slashdot
Del.ici.ous
Stumble
Reddit
