UTStarcom has announced plans to sell its mobile phone division - Personal Communications Division ("PCD") to a newly formed entity controlled by AIG Vantage Capital, a part of AIG Investments. The expected proceeds of approximately US$240 million will be based primarily on the net working capital levels, subject to certain adjustments. In addition to the cash consideration, UTStarcom could also receive up to US$50 million based on a three-year earn out provision.

 UTStarcom brought the handset division from Audiovox almost four years.

The sale is the first action of the company's new CEO, eter Blackmore who took over just a few days ago. Blackmore, took over from Hong Liang Lu, who became the company's executive chairman of the board.

UTStarcom sells the disposal is consistent with its focus announced in late 2007, which is aimed at maximizing its opportunities in its core IP-based product offerings in rapidly growing economies around the world.

Subsequent to the transaction, the privately held company will be called Personal Communications Devices and will be led by PCD's current management team who will be part-owners of the company with AIG Vantage Capital and other investors. The Handset business unit of UTStarcom will continue to design and provide devices to be sold in the Americas through Personal Communications Devices as part of a supply agreement. UTStarcom will also sell devices directly to carriers in other areas of the world.

Source:cellular-news