Significantly Strengthens SanDisk's Financial Position by Reducing Lease Obligations and Increasing Cash
MILPITAS, Calif.--(BUSINESS WIRE)--
SanDisk (NASDAQ:SNDK) announced today that it has signed a definitive
agreement with Toshiba to restructure their Flash manufacturing joint
ventures operating at the 300-mm Fab 3 and Fab 4. As part of the
agreement, more than 20 percent of the joint ventures’ capacity will be
transferred to Toshiba. The restructuring will result in the transfer of
equipment lease obligations from SanDisk to Toshiba and a cash payment
to SanDisk for the transfer of certain equipment currently owned by the
joint ventures. The total value to SanDisk is approximately 80 billion
yen, or approximately $890 million based on current exchange rates.
Approximately two-thirds of the total amount will reduce SanDisk’s
current equipment lease obligations by about 28% and approximately
one-third will be received by SanDisk in cash. The lease transfers and
cash payment are expected to be completed by the end of the first
calendar quarter of 2009.
SanDisk and Toshiba will remain equal partners for the capacity
remaining in the joint ventures. SanDisk will have the option to
purchase a part of the transferred capacity from Toshiba on a foundry
basis and retains the option to continue to invest up to 50 percent in
future Fab 4 expansions and technology transitions in Fab 3 and Fab 4.
In addition, the parties will continue their existing joint technology
development in advanced NAND and 3D read/write memory.
“We are pleased to sign this definitive agreement with Toshiba which
reflects the long-term commitment of both companies to our partnership.
This agreement will reduce our capital spending, strengthen our
financial position and increase our business flexibility by allowing us
to return more rapidly to our desired captive/non-captive supply model.
Importantly, this maintains the economies of scale of Fab 3 and Fab 4
for SanDisk and the deep technology and manufacturing cooperation
between SanDisk and Toshiba,” said Dr. Eli Harari, Chairman and Chief
Executive Officer, SanDisk.
Forward-Looking Statements
This press release contains certain forward-looking statements,
including statements about the timing and certainty of the closing of
the transactions described herein, the intended benefits to SanDisk of
the transactions, including reduced capital spending, strengthened
financial position, enhanced business flexibility, increased cash,
reduced lease obligations, strengthened balance sheet, decreased capital
commitments and an improved balance between captive and non-captive
supply, that are based on our current expectations and involve numerous
risks and uncertainties that may cause these forward-looking statements
to be inaccurate. Risks that may cause these forward-looking statements
to be inaccurate include among others: our failure to complete the
transaction on the terms set forth in the definitive agreements in a
timely manner or at all, the potential that the transfer of the leases
contemplated by the definitive agreements may not be approved by the
leasing banks, due to a default or otherwise, or the failure of any of
the other conditions precedent set forth in the definitive agreements,
and the other risks detailed from time-to-time under the caption “Risk
Factors” and elsewhere in our Securities and Exchange Commission filings
and reports, including, but not limited to, our most recent Annual
Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q.
SanDisk undertakes no obligation to update any of its forward-looking
statements.
About SanDisk
SanDisk Corporation, the inventor and world’s largest supplier of flash
storage cards, is a global leader in flash memory – from research,
manufacturing and product design to consumer branding and retail
distribution. SanDisk’s product portfolio includes flash memory cards
for mobile phones, digital cameras and camcorders, digital audio/video
players, USB flash drives for consumers and the enterprise, embedded
memory for mobile devices, and solid state drives for computers. SanDisk
(www.sandisk.com/corporate)
is a Silicon Valley-based S&P 500 company, with more than half its sales
outside the United States.
Source: SanDisk Corporation
SanDisk Corporation
Jay Iyer, 408-801-2067 (Investors)
Ryan
Donovan, 408-801-2857 (Media)
