Electronics Production | March 02, 2009
Spansion with bankruptcy protection
The US-based chipmaker Spansion has filed for bankruptcy protection under Chapter 11 at the U.S. Bankruptcy Court in Wilmington, Delaware. The company announced $2.4 billion and assets of $3.8 billion as of the end of the 3Q/2008.
Last week, the company - a 2005 spin off by Advanced Micro Devices - announced plans to reduce its workforce by 35%. "Given our focus on Spansion's future, management and the Board have concluded that chapter 11 provides the most effective means for Spansion to preserve its business, meet its post-petition obligations and maintain customer confidence and continuity while we complete this restructuring," said President and CEO John Kispert. "At the same time we will continue to explore opportunities for a strategic transaction to ensure that we are doing all we can to maximize value for our stakeholders." The decision to seek chapter 11 protection was made in consultation with an ad hoc consortium of holders of Spansion's $625 million Senior Secured Floating Rate Notes due 2013. Spansion continues to be actively engaged in constructive discussions with this ad hoc consortium for the development of a plan of reorganization that would permit Spansion to emerge quickly from chapter 11 in a stronger financial and competitive position and for the continued exploration of multiple proposals from multiple parties seeking a strategic transaction. The company believes that its current and anticipated cash resources will be sufficient to pay its expenses and maintain its business operations while it explores and implements options to address its long-term cash needs. Among other things, the company is in discussion with the ad hoc consortium about providing a debtor-in-possession (DIP) credit facility, while also simultaneously pursuing other options intended to provide the company with additional liquidity for its long-term cash needs. As previously announced, on February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan, voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings.