NZ Smartphone component Rakon has sold the majority of its Chinese subsidiary Rakon Crystal to Chinese-listed firm ZheJiang East Crystal Electronic (ECEC), a specialised electronic components manufacturer.
As Stuff.co.nz reports, Rakon said that ECEC would buy 80 per cent of the shares in Rakon Crystal for US$18.8 million (AUD$19.9m).
Rakon Crystal owns a manufacturing facility in Chengdu, China.
According to Rakon, the latest decision will result in a new joint venture ownership of Rakon Crystal. Rakon will hold 5 per cent of the company's shares while existing partners will own the other 15 per cent.
The acquisition would see Rakon and ECEC working together in the areas of technology, capital, management and markets for smart wireless devices (SWD) by sharing resources and capabilities, it said.
In November last year, Rakon cut 60 of its 430 NZ-based jobs as part of its plan to shift manufacturing capacity to Asia.
According to Radio New Zealand News, the sale will enable Rakon to write off $NZ32 million from its investment in the factory to date.
Rakon Managing director Brent Robinson says that the write-off should go a long way towards negating most of the company’s debt.
According to Robinson, operating in the Smartphone business has been difficult for his company and it plans to focus in other directions.
At the same time, Rakon will retain the opportunity to develop the business in a market that has become competitive quickly.