TORONTO -- Celestica will exercise its option to redeem nearly $340 million in outstanding 7.875% senior subordinated notes due 2011, a move that will save the EMS company $14 million this year in interest expenses.

Celestica, the world's fourth-largest EMS company, expects that the redemption will occur within 30 to 60 days. It has an outstanding principal amount on the notes of $339.4 million. The redemption will be funded out of the company's existing cash resources.

Based on its June 30, financial results, upon completion of the redemption, the company will have approximately $764 million in cash, $223 million in senior subordinated notes outstanding due 2013, and an estimated reduction to its 2010 net interest expense of approximately $14 million.

It's the second time this year Celestica retired debt early. In February, the company offered up to $150 million to retire a portion of the 2011 notes.

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