Chip firm pays US$5.7m to terminate Dublin lease

29 Jan 2008

Silicon Valley chip designer Ceva, which merged with Irish chip firm Parthus in 2002, has paid approximately US$5.7m to terminate the lease of a building on Dublin’s Harcourt Street.

Ceva, which licenses silicon intellectual property to mobile phone makers and consumer electronics firms, said that its annual lease payment for the Harcourt Street property was costing it US$1.3m a year to sustain.

It said that around 14 years remained on the lease but the US$5.7m payment will release it from the obligation.

The company, which has R&D operations in Limerick, Cork and Belfast, as well as offices on Baggot Street, said the US$5.7m payment will be recorded as a cash outflow in the first quarter of 2008.

It says it anticipates recording an additional cost of US$3.5m in extra re-organisation expenses in the first quarter.

“We are pleased to have surrendered and terminated the Harcourt lease,” said Ceva’s chief financial officer, Yaniv Arieli. “The surrender and termination of the lease will contribute positively to the company’s future cash flow and reduce future lease expense obligations.

“We had terminated another Dublin, Ireland lease located on Hatch Street in the fourth quarter of 2007. The company’s current real-estate status is in line with its current business needs,” Arieli added.

In December, GloNav, a company that Ceva and former Parthus chief executive Brian Long of Atlantic Bridge Ventures jointly invested in, was sold to NXP Semiconductors for US$110m.

GloNav, which has offices in Dublin, designs computer chips and subcontracts out their manufacture.

Atlantic Bridge and Ceva were able to quadruple their investment in GloNav. Ceva held 20pc of the company while Atlantic Bridge, which originally invested US$16.2m in the company, held 50pc of GloNav.

By John Kennedy