STMicroelectronics to buy semi business from Arkados

STMicroelectronics will pay Arkados USD 11 million under the agreement, out of which it has already made an initial payment of USD 7 million in exchange for a license from Arkados. A portion of this payment was applied by Arkados to settle approximately USD 12 million of USD 20 million of outstanding secured debt. The parties expect to complete this transaction in the first quarter of 2011. This critical initial step is part of a major balance sheet restructuring plan that will consist of elimination of nearly its entire USD 30 million of debt – approximately USD 20 million of secured debt through a cash settlement and elimination of the nearly USD 10 million of unsecured debt primarily through the conversion into equity of Arkados. Upon the completion of the transaction Arkados will focus on development, manufacturing, and sales of consumer electronics and Smart Grid products based on powerline communication semiconductors. Arkados will also continue to provide consulting and development services to existing customers and users of powerline communication semiconductors. Arkados' President and CEO Oleg Logvinov and Senior Vice President of Engineering Michael Macaluso are transitioned to STMicroelectronics as part of this agreement. Grant Ogata, currently the Executive Vice President of Arkados, will serve as Acting CEO of Arkados.