BVI-registered manufacturing company Deswell Industries, Inc. had entered into an agreement with a third party to sell its former manufacturing facility in Shenzhen province, China. This facility, which consists of approximately 112,900 square feet of manufacturing space, was formerly used by the BVI corporation for its plastic injection molding operations for approximately $7.3 mln.
The company purchased the property in fiscal year 2000 for approximately $1,461,000. It was put on sale after 2007, when Deswell Industries completed the transition of its injection molding plastic manufacturing operations to a newly constructed and substatially larger facility in Houjie, Dongguan, China, and closed the plant in Shekou, Shenzhen.
The close of property sale is planned to occur by the end of November 2009, after required local government transfer and other approvals are obtained. In case if sale of property in Shenzhen closes by this date, Deswell expects to record a gain on the sale, net of transaction costs in the company’s financial statements during the third fiscal quarter ending December 31, 2009, in which the closing of the transaction occurs.