Zhone Stays Put in O-Town
It may be struggling to turn a profit, but Zhone says it is staying put in its Oakland, Calif., headquarters and actually entertained an offer to buy its campus as recently as this summer.
The company's CFO, Kirk Misaka, responding to yesterday's rumor, writes in an email to Light Reading: "Zhone has no current plans to sell its Oakland campus nor rent additional space in the area."
Then Misaka dropped this bombshell: "During the summer, another party approached us with an interest in the potential acquisition of the Zhone campus because of its uniquely superior attributes. After a short diligence period, however, the other party withdrew its offer and no further discussions have occurred."
In its SEC filings, Zhone discusses the loan relating to its Oakland campus and gives some idea of the property's worth: "As of September 30, 2009, and December 31, 2008, the debt was collateralized by land and buildings with a net book value of $15.7 million and $16.1 million, respectively."
The filings also note that Zhone does have some excess space in Florida, acquired when the company bought Paradyne: "We intend to continue to occupy only a portion of these facilities and are evaluating our options to exit the excess portion of the lease."
Zhone's real estate holdings are of interest as it looks for ways to trim expenses and expand abroad to take advantage of growth in international markets, where it gets about half of its revenues. Zhone's overall net revenues for the nine months ended September 30 were down by $24.7 million compared to the year-ago period. (See Zhone Reports Q3.)
— Phil Harvey, Uniquely Superior Editor, Light Reading