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Local Tech Wire
KANNAPOLIS, N.C. – Billionaire David Murdock remains committed to development of the $1.5 billion despite a slowdown in the economy and setbacks in partnerships for the massive biotechnology project.
Murdock considers the project his legacy and is part of his commitment to better health through improved diet. Much of the research at the campus is focused on health, such as the massive so-called MURDOCK study being conducted by Duke University.
"Everyone has been cutting back," Murdock said in with the Charlotte Observer this week. "We’re a captive of a bad economy, but we’re in better shape than most."
The project has encountered delays in funding, lost a potential partner in Wilmington, N.C.-based Pharmaceutical Product Development (Nasdaq: PPDI), saw Pepsi reconsider joining it, and also has not received some support from the City of Kannapolis which has been unable to sell special bonds to help with some aspects of the project.
Last week, Dole Food, which is owned by Murdock, said it would offer $500 million in stock. It plans to use proceeds to help pay down debt. However, Murdock told the Observer that the stock offering was not linked to either the Kannapolis project or the real estate and construction firm he owns, Castle & Cook, which is developing the campus.
"The economy has slowed down and caused me to slow down," Murdock said. "But I’m still doing many things there … and still spending millions on the Core Lab."
The Core Lab is the centerpiece of the campus, which already is closely aligned with UNC-Chapel Hill, Duke University, N.C. State, UNC Charlotte and several other universities. Private sector partners include Red Hat.
Murdock has already invested some $500 million in the campus, he told the Observer.
Dole plans to use the offering’s proceeds to pay off some debt, with any remaining funds used for general corporate purposes. The firm has more than $2 billion in debt even after paying off $145 million in the quarter ending June 30 and $480 million over the past five quarters, Dole said in a quarterly financial report issued Aug. 4.
Dole has been selling assets to pay down debt. Earlier this month, Dole said it plans to sell certain operating properties in Latin America for about $68 million to help pay down debt. The deal is expected to close in its fiscal third quarter. Dole said cash flow generated from operations jumped sharply in the second quarter ended June 20, to $170 million compared with $60 million the same period a year ago.
The company reported a net profit of just over $20 million.
Dole had 2008 revenue of $7.6 billion.