SS,
This out after the bell:
Porta Systems Corp. Announces Reorganization of OSS Division and Preliminary
Discussions With Senior
And Subordinated Lenders
Business & Technology Editors
SYOSSET, N.Y.--(BUSINESS WIRE)--March 14, 2001--Porta Systems
Corp. (AMEX:PSI) chairman and chief executive officer William V.
Carney announced today that Porta has reorganized the operations of
its OSS division in order to significantly reduce its costs.
Porta has substantially reduced its United States OSS operations
and has relocated most of this division's activities to the United
Kingdom, where a significant portion of its sales and marketing
activities are conducted and a significant portion of revenue is
derived.
Mr. Carney also said that Porta is actively engaged in the pursuit
of the possible sale of one or more of its divisions. The proceeds
from any such sale would be used to reduce debt. However, he said that
the previously announced negotiations with the potential buyer for one
of its divisions have been discontinued.
On March 13, 2001, Foothill Capital Corp., Porta's senior lender,
agreed to allow the Company to defer certain principal and fee
payments which are currently due. Porta is continuing its negotiations
with Foothill, with respect an extension of its overall facility,
which expires in July 2001. Foothill had also extended Porta's excess
borrowing ability until July 2, 2001.
Porta is also engaged in preliminary discussions with the holders
of certain of Porta's subordinated notes with respect to the possible
extension of the notes or the exchange of notes for equity in Porta.
Porta has failed to make principal payments on $900,000 of the notes
which were due on January 3, 2001, and it has not made the interest
payment due January 3, 2001 on the subordinated notes in the principal
amount of $6,000,000. Pursuant to the terms of Porta's loan agreement
with Foothill, Foothill has served notice on Porta to prohibit
interest and principal payments on the subordinated debt at this time.
Porta Systems Corp. designs, manufactures, markets and supports
communication equipment used in telecommunications, video and data
networks worldwide.
Any forward-looking statements in this release are made pursuant
to the "safe harbor" provisions of the Private Securities Litigation
Act of 1995. Investors are cautioned that actual results may differ
substantially from such forward-looking statements. Forward-looking
statements involve risks and uncertainties including, but not limited
to, the successful completion of negotiations with the holders of
subordinated debt and the extension of Porta's agreement with
Foothill, and the sale by Porta of one or more of its divisions and
other risks detailed in Porta's periodic filings with the Securities
and Exchange Commission.
--30--sdg/ny*
CONTACT: Porta Systems Corp.
Edward B. Kornfeld
Chief Financial Officer
516/364-9300
KEYWORD: NEW YORK
INDUSTRY KEYWORD: TELECOMMUNICATIONS HARDWARE NETWORKING
MANUFACTURING
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Mar-14-2001 21:05 GMT
Symbols:
US;PSI
Source BW Business Wire
Categories:
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