CAMARILLO, CA--(Marketwired - Nov 7, 2013) - Vitesse Semiconductor Corporation (
"Vitesse is committed to managing our capital structure in order to achieve sustained profitability," said Chris Gardner, CEO of Vitesse. "This loan resolution provides us with the flexibility to use our cash to pre-pay our debt, enabling us to further de-leverage the Company. Greater cash flexibility allows Vitesse to make prudent near-term investments to amplify the market traction of our new and next-generation product portfolios thereby increasing stockholder value."
The loan amendment modifies the Company's Term A Loan in the principal amount of $7.9 million and Term B Loan in the principal amount of $9.3 million. Both Term A and Term B Loans now come due on August 31, 2016, and each bears interest in cash at 9.0% per annum payable quarterly in arrears. The Term B Loan remains convertible into Vitesse common stock at a price of $4.95 per share through October 30, 2014. The loan amendment also permits the Company to pre-pay the Term A and Term B Loans in whole or in part subject to the payment of a prepayment fee, and to pre-pay the Company's convertible second lien debentures prior to their maturity in October 2014.
The Company repurchased Whitebox's $13.7 million of debentures at a price of 107% of their principal amount. The repurchased debentures were convertible into approximately 3.0 million common shares. Following the repurchase, $32.8 million of convertible second lien debentures remain outstanding. The Company intends to opportunistically repurchase additional debentures ahead of their maturity.
The original loan agreement was entered into on August 23, 2007. Additional detail about the loan amendment and repurchase of debentures will be available in the Company's Current Report on Form 8-K to be filed with the Securities and Exchange Commission.
Vitesse is a registered trademark of Vitesse Semiconductor Corporation in the United States and other jurisdictions. All other trademarks or registered trademarks mentioned herein are the property of their respective holders.
Cautions Regarding Forward Looking Statements
All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward-looking statements that are based on our current expectations, estimates and projections about our business and industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," and similar terms, and variations or negatives of these words. Examples of forward-looking statements in this release include the Company's intention to repurchase additional debentures. Forward-looking statements are not guarantees of future performance and the Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that could affect the Company's forward-looking statements include, among other things, the unwillingness of debenture holders to sell their debentures to the Company on acceptable terms, or at all. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.