SemiLEDS (LEDS) Discloses Impairment of Xurui Guangdian Assets; Equity Investment Moves to Zero
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On November 19, 2012, the Chief Executive Officer and Chief Financial Officer of SemiLEDs Corporation (Nasdaq: LEDS) concluded that the Company’s assets relating to Xurui Guangdian Co., Ltd. (“China SemiLEDs”), including the Company’s 49% equity interest in China SemiLEDs and its accounts and notes receivable from China SemiLEDs, have been materially impaired. The conclusion followed a meeting of representatives of China SemiLEDs shareholders in which such officers participated and reflected the increased likelihood that the shareholders of China SemiLEDs would fail to agree to and implement a restructuring plan for China SemiLEDs.
The Company expects that its proportionate share of an impairment charge on China SemiLEDs’ long lived assets will exceed the value of its equity investment in China SemiLEDs. As a result, the Company expects to reduce the value of its equity investment in China SemiLEDs from $8.7 million, as of May 31, 2012, to zero, as of August 31, 2012, primarily due to such impairment charge. The Company also expects to record an impairment charge on its accounts and notes receivable from China SemiLEDs in the amount of $1.4 million.
The impairment charges will be reflected in the Company’s financial statements for the year ended August 31, 2012.
The impairment charges are not expected to result in future cash expenditures by the Company.
The Company expects that its proportionate share of an impairment charge on China SemiLEDs’ long lived assets will exceed the value of its equity investment in China SemiLEDs. As a result, the Company expects to reduce the value of its equity investment in China SemiLEDs from $8.7 million, as of May 31, 2012, to zero, as of August 31, 2012, primarily due to such impairment charge. The Company also expects to record an impairment charge on its accounts and notes receivable from China SemiLEDs in the amount of $1.4 million.
The impairment charges will be reflected in the Company’s financial statements for the year ended August 31, 2012.
The impairment charges are not expected to result in future cash expenditures by the Company.
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