UTStarcom Packs for China
Investment firm Beijing E-town International Investment and Development Co. Ltd (BEIID) is putting $25 million into UTStarcom, and another $23.5 million is coming in from unrelated firms Ram Max Group Limited and Shah Capital Management. The three groups are receiving newly issued UTStarcom shares in return -- about 22 million of them, at $2.20 apiece. (See UTStarcom Issues New Stock.)
UTStarcom will be moving its headquarters to Beijing -- which had been previously announced -- and will install a new CEO: Jack Lu, previously a chief operating officer at optical components vendor Source Photonics Inc.
The changes end the tenure of Peter Blackmore, who joined UTStarcom in the summer of 2007 as the CEO designate; he spent a year as COO before taking the CEO spot. During that year, his team investigated possibilities including a sale of the company, but instead decided to restructure around UTStarcom's own products. (See UTStarcom Readies Plan B and UTStarcom Unveils New Look.)
That doesn't appear to have worked. UTStarcom has continued to slash jobs, including a halving of the staff in June. (See UTStarcom Cuts 2,300 Jobs.)
As Blackmore did, Lu will first join UTStarcom as chief operating officer, becoming CEO on June 30 or three months after the investment deal closes, whichever comes last. Once Lu ascends, Blackmore will retire from UTStarcom.
— Craig Matsumoto, West Coast Editor, Light Reading