China's Bird to sell cell phone business to JV partner

Zhejiang-based electronics manufacturer Ningbo Bird Co. Ltd<600130> announced in a statement yesterday that it will sell all of its stake in the joint venture Ningbo Bird Sagem Electronic Co., Ltd, to its partner Sagem Mobiles, a French electronics company.

The 50% stake held by Bird will be sold at RMB 159 million, according to an agreement inked by both sides. However, the deal still needs the approval of the Chinese company's shareholders.

The move is a further strategic step for Bird to reduce its share in the cell phone market due to the fierce competition. Though it will still keep its production base in Suizhou, Hubei province, with R&D, outsourcing, production and sales as its core business, its exports and sales of cell phones may be reduced due to less overseas orders through Sagem.

Bird expects to use the money from the share sale to pay off its growing debts, as the company has forecasted a substantial loss in profit for 2007.