NEW YORK-CellStar Corp., a Carrollton, Texas-based distribution and logistics provider to the wireless communications industry, said June 5 it plans to exit Argentina, Peru and the United Kingdom “as soon as practical.”
The company expects to record a one-time, after-tax charge of about $10 million, primarily “for the difference between the historical book value of those operations and the net proceeds received.” However, it also anticipates it will “return to the United States an estimated $4 million in cash over the next three months from exiting these markets.”
Within the next six months, CellStar also said it plans to evaluate the profit and return on investment potential of “the balance of its European and Latin American markets” and will exit any that do not meet its long-term strategy criteria. The company has negotiated amendments to its revolving credit facility to allow it to pursue the exit plans announced and contemplated.
Robert Kaiser, chief financial officer, said CellStar plans to focus on “markets which provide the best opportunities for the company,” including Asia, Mexico and the United States, particularly the Miami area.
