Powerwave Sells Assets in ChinaOriginally published April 26, 2012 at 3:01 p.m., updated April 26, 2012 at 3:03 p.m.
Santa Ana-based Powerwave Technologies Inc. has sold some of its assets in China to a local manufacturer for $12.5 million.
The cash-strapped company, which makes cellular base station gear for wireless networks, agreed to sell select assets to Shenzhen Tatfook Technology Co. Ltd., which in turn will provide Powerwave with a long-term manufacturing and supply agreement.
The transaction is expected to close this quarter.
Powerwave makes antennas, filters and other equipment for cell phone towers.
Its devices capture and boost radio signals between cell phones and base stations inside towers.
The deal calls for Tatfook to pay Powerwave $5 million and ongoing royalty fees under the licensing and manufacturing deal to make and sell selected antenna and tower mounted amplifier products in China.
Powerwave will maintain its technology, research and development operation, customer relationships and contracts, while benefiting from Tatfook’s scale and low cost structure, according to Powerwave Chief Executive Ronald Buschur.
Tatfook employs more than 4,000 people in two large manufacturing plants in Shenzhen and Anhui, and five R&D centers in Beijing, Shanghai, Shenzhen, Chengdu and Italy.
The pending sale is the latest move by Powerwave in the last six months to conserve cash or build up capital.
In February it announced another round of restructuring.
In October its board and stockholders approved a 1-for-5 reverse split of its outstanding shares of common stock and a reduction of authorized shares of its common stock.
The move was initiated to prop up Powerwave’s share price and stave off a possible delisting by Nasdaq, which requires companies to maintain a share price above $1.
That same month it sold its Santa Ana headquarters in a lease-back deal—as part of a restructuring plan—for $49.1 million in one of the larger office transactions of last year.
Powerwave’s troubles first surfaced in October when sales in the third quarter plummeted 51% from a year earlier to $77.1 million.
Since then the company has been hampered by continued declining sales linked to a significant slowdown in equipment spending by Dallas-based AT&T Inc. and other North American network operators.
Powerwave shares were up 1% to 99 cents in afterhours trading with a market value of $31 million.