First BRKS and now ALTR face delisting over options!
Altera could face delisting; Brooks note holders want cash
Dylan McGrath
EE Times
(05/17/2006 7:54 PM EDT)
SAN FRANCISCO — The controversy over historical stock options granting practices at two electronics companies heated up Wednesday (May 17), with programmable logic supplier Altera Corp. saying its stock could be delisted from the Nasdaq market and fab automation provider Brooks Automation Inc. saying it could be compelled to repay some subordinated notes earlier than expected.
Altera (San Jose, Calif.) said it has received notice from Nasdaq that the company's stock could face delisting for not filing its most recent quarterly report in a timely manner.
Altera said earlier this month that it would delay the filing of its most recent quarterly report pending the outcome of an investigation by a special committee of independent directors to review the company's historical stock options granting practices from 1996 to 2000. The investigation is ongoing.
Altera is one of about a dozen companies, many of them in electronics, to publicly announce that it would examine historical stock options granting practices in the wake of a March 18 article in the Wall Street Journal that questioned whether some companies had been "backdating" stock option grants to result in their issuance at the best possible time. Altera, however, has not specifically said its potential stock options granting issues pertain to the practice of backdating.
Brooks has also been reviewing its own historical stock options granting practices in the wake of the Journal story. The company said last week that it faces possible Nasdaq delisting for failing to file its most recent report in a timely manner and that the U.S. Securities and Exchange Commission was conducting an informal inquiry into its historical stock options granting practices. Brooks has said it would re-state its quarterly results for 28 consecutive quarters from fiscal 1999 through fiscal 2005.
Brooks said Wednesday that holders of some outstanding convertible subordinated notes due in 2008 have notified the company that its failure to file its quarterly report in a timely manner represents a breach of the company's obligations under the indenture governing the notes. If Brooks fails to file the report within 60 days, the holders of the notes could demand payment sooner, Brooks (Chelmsford, Mass.) said.
Brooks said that, as of March 31, it held approximately $373 million of cash and marketable securities. The notes currently have an aggregate outstanding principal value of $175 million, the company said. Brooks said it believes that if the company is required to repay the notes it would still have adequate funds to cover its working capital and capital expenditure requirements for both the short and long term.
Altera said it would request a hearing to avoid stock delisting by the Nasdaq, but that there can be no assurance that a panel will grant the company's request for continued listing. Altera will remain listed pending the outcome of the hearing, which is not yet scheduled.
Vitesse Semiconductor Corp., another of the electronics companies that has been caught up in questions about historical stock options granting practices, said Wednesday that it has terminated three previously suspended executives, including the company's CEO. Vitesse (Camarillo, Calif.) said it has also expanded its investigation over its business practices. |
