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Monday, March 24, 2008
SINGAPORE - March 24, 2008 - Creative Technology Ltd., a worldwide leader in digital entertainment products, today announced that the Company has signed a Memorandum of Understanding (MOU) with a buyer for the proposed sale and leaseback of the Creative Resource building, which houses the corporate headquarters of the Company and its subsidiaries in Singapore.
The sale price for this proposed transaction is S$250 million (US$180 million), with a leaseback of the whole building for a period of five years with an option for additional periods of three and two years.
The proposed sale and leaseback transaction is conditional upon and subject to certain conditions, including but not limited to, satisfactory completion of legal and building due diligence by the purchaser, the Company's shareholders' approval of the transaction, and applicable regulatory approvals.
The proposed sale of the property constitutes a major transaction under Rule 1006 of the Singapore Exchange Securities Trading Limited Listing Manual and accordingly is subject to shareholders' approval at an Extraordinary General Meeting of the Company (EGM) to be convened at a later date. A circular to the Company's shareholders, together with notice of the EGM, will be dispatched to shareholders in due course. The circular will contain more details of the proposed transaction.
The proposed transaction is expected to be completed by the end of June 2008.
Creative expects to make a gain on sale of the property of about S$200 million (US$144 million) from this transaction. In accordance with US GAAP, this amount will be treated as a deferred gain and will be amortised and recognised in the Company's Income Statements over the lease term of five years.==========================================================
I don't know why Creative made such a move. Others say Mr Sim is having financial problem that he has to sell the building to offset the loss incurred during the mp3 war with Apple. Well, I hope this is just a smart business sense move rather than a desperate cashflow move. Anybody who's in business course would care to comment on Mr Sim's move? Seriously, Creative is the only company from Singapore that has worldwide recognition, I wouldn't want to see it collapse. Their computer speakers and sounds cards are the best around. Just a count and I can already see i have 3 Creative products on my computer desk.
The other best product by Singapore is Trek thumbdrive. Haven't heard of it?? They're the one who hold the patent for thumbdrive. If u're still unaware, thumbdrive originated from Singapore. Companies like SanDisk, Toshiba and Imation has to pay Trek fees in order to make thumbdrives to be sold to consumers.