Wednesday, August 12, 2009


In the June restructuring call, Peter mentioned hiring a real estate company to sell their Hangzhou property. It is interesting but probably not surprising that this company is Gemdale. Here is a chart of Gemdale the past 3 years (split adjusted).

UT sold their Gemdale shares between 15-20Y back in late 2007 netting about $90m. The stock actually got to a low of 3+Y and now trades at about 17Y.

The property is on the books for around $160m and another shareholder (Techbroker) talked about the rising property values in China and an estimated $300m for the land alone.

The company is projected to end the year with net cash of over $200m and to break even next year. Working capital needs (credit lines) are much lower than before but so is their available credit. The building could be use for collateral (and it will be if certain threshold amounts are used up per the last quarterly filing) so I'm not sure what they would need a major cash influx for. Peter did mention the upcoming Phase III BSNL contract so that they may use the funds for that contract. Anyway, that sale will take some time as Peter mentioned but its interesting that he mentioned it again this last call.

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