AMD gets creative in its pursuit of cash.
Advanced Micro Devices (AMD) this week entered in an agreement to sell and lease back its Lone Star Campus located in Austin, Texas. The new owner will be 7171 Southwest Parkway Holdings, LP, an affiliate of real estate investment company Spear Street Capital. AMD says the sale is expected to generate $164 million in cash, the proceeds of which will be reflected in the chip designer's Q1 financial statement.
"As we reset and restructure AMD for long-term success, we are taking a number of steps designed to optimize our business and monetize assets," said Devinder Kumar , chief financial officer of AMD. "The sale of our Austin campus will unlock a significant amount of capital, while the multi-year lease back of our Austin campus reconfirms our long-term commitment to the city that so many AMD employees have called home since 1979."
That long-term commitment AMD speaks of will last at least 12 years, which is the duration of the lease AMD signed. There's also an extension option worked into the contract so that AMD can continue its operations on the campus beyond 2025, if it chooses to do so.
This isn't a new strategy for AMD. The company did the same thing with its headquarters in Sunnyvale, California back in 1998. More recently (2008), AMD sold and leased back its major site in Markham, Ontario, Canada, and will attempt to do the same with its Building 3 property in Austin, Texas.
AMD employs around 1,900 people in Austin.