Wednesday, February 23, 2011
Electronics manufacturing supply contractor Jabil Circuit Inc. has announced it has acquired three factories in France and Italy that it had sold off in July 2010. The move was made because of "multiple breaches" of terms and conditions by the purchaser including the diversion of funds that had been designated as working capital, Jabil said in a statement.
Jabil plans to establish viable operations at the sites but did not state how much it is paying to retake control. Nor did Jabil identify the plants their locations or the erstwhile purchaser. The move is expected to cost between $25 million and $40 million in terms of write-offs.
"We believe our actions today are in the best interests of the affected customers, former employees, Jabil shareholders, and the well being of the local communities where we operate," said Tim Main, Jabil's president and CEO, in a statement. "Although the transgressions of the purchaser that led to this action were beyond our control, we could not stand-by and allow the circumstances to deteriorate further, risking more serious consequences to our stakeholders."
Pursuant to the agreements, Jabil currently expects, based on existing information, to take a one-time charge of $25 million to $40 million to earnings in its second fiscal quarter of 2011. This charge is principally the write-off of working capital loans for the operations and other expenses associated with the transaction.
Operations in Meung-sur-Loire, France, which were separately and successfully divested October 2009, are not affected by these actions, Jabil said.
By: DocMemory
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