Chet,
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If this is true, goodbye JTS.
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Perhaps, not... It is possible that JTS realized that they wouldn't be able to make $$$ off of 6.4 Gig drives and in lieu of throwing good money (what's left) after bad, they are ramping up for MR. (Albeit while IBM & others are moving to GMR.)
From JTS' April 3, 1998 PR:
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JTS Announces $10 Million Financing Agreement With Export-Import Bank of India
SAN JOSE, Calif., April 3 /PRNewswire/ -- JTS Corporation (Amex: JTS - news), announced the completion of a $10 million loan facility with the Export-Import Bank of India. The facility will be utilized to finance the purchase of production assembly and test equipment at the company's manufacturing plant in Chennai, India.
''We are very encouraged by the continued support we are receiving from financial institutions in India,'' said Joseph Prezioso, Chief Financial Officer of JTS. ''We are excited to be initiating a relationship with the Export-Import Bank of India; we believe they can be a strategic financial partner of JTS.'' [ Likely $$$ source once listed OTC, IMO.]
The financing line will be sufficient to meet the company's manufacturing capital requirements for the current fiscal year. The loan term is 5 years and is secured by a mortgage of fixed assets of the company's Indian subsidiary, JTS Technology Ltd.
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4.3 GB is currently selling in the low $100s as manufacturers get rid of their inventories so they can focus on higher capacities. Soon no one will want them. Even today I'm finding 4.3GB restrictive. A couple of years back 1 Gig seemed plenty. Two years from now even 10 Gig may not suffice.
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Agreed. (However, it may be less than two years away.)
From an earlier post of mine:
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Still no murmur of when/where 6.4 Gig drive is. If there are so many problems bringing a 6.4 MIG drive to market then they should go with MR heads exclusively. (Providing that the capital has indeed been spent on updating the India plant.)
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FWIW, today Zenith Electronics Corp. (ZE) announced that they are filing bankruptcy and their shares still traded at 5/8 despite: "Under the plan, all outstanding common stock will be canceled, and holders of common stock will receive no distribution."
Interestingly enough, just two years ago ZE traded @ $ 26.
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GLENVIEW, Ill., May 21 /PRNewswire/ -- Zenith Electronics Corporation (NYSE: ZE) today announced a comprehensive restructuring plan designed to reduce its debt, enhance its competitiveness, and position the company for growth and consistent profitability.
Zenith's board of directors has unanimously approved in principle a financial restructuring to be implemented through a prepackaged plan of reorganization. Zenith said the financial restructuring is key to management's plan to execute a comprehensive operational restructuring. The terms of the financial restructuring were separately reviewed by a special committee of independent directors, which recommended approval to the board.
"Today, we are taking a major step forward in our efforts to improve Zenith's financial health and to rebuild Zenith into a brand and technology leader," said Jeffrey P. Gannon, Zenith president and chief executive officer.
Financial Restructuring
Under the proposed reorganization plan, trade creditors and vendors will not be impaired and will continue to be paid in the ordinary course of business. In addition, Zenith will continue to pay employees' wages, salaries and benefits, and will continue to fulfill obligations to customers throughout the reorganization.
The company also has reached an agreement in principle with LG Electronics Inc. (LGE), Zenith's majority stockholder, for LGE's support and participation in the plan. Under the plan, LGE will convert approximately $200 million of Zenith obligations to LGE into common stock of the company, representing 100 percent of the equity in the restructured Zenith. In addition, approximately $210 million of claims held by LGE will be exchanged for certain Zenith manufacturing assets in Mexico and secured notes due 2008 on which interest may be paid in kind under certain circumstances. LGE will provide an additional $60 million of credit support to help finance the implementation of the plan. Zenith and LGE are in discussions with third-party lenders about additional financing.
The plan provides for current holders of the company's 6-1/4% convertible subordinated debentures to receive $40 million of new 6-1/4% subordinated debentures maturing in 2010. It is currently contemplated that the claims of all other creditors will either not be impaired by the plan or be consensually restructured. The restructuring will reduce Zenith's outstanding debt by approximately $250 million.
Under the plan, all outstanding common stock will be canceled, and holders of common stock will receive no distribution.
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I feel JTS has an outside chance of still being in business in 5 years. My question is still: "Will current shareholders reap any rewards?"
--Dennis |
