OCZ To File for Bankruptcy, Toshiba To Purchase Its Assets
SSD maker OCZ Technology said it would file for bankruptcy and that it had received an offer from Toshiba to buy its assets in a bankruptcy proceeding.
The SSD maker took a loan from Hercules Technology Growth Capital at 15 percent early in 2013. However, it failed to comply with the terms of its loan agreement with Hercules Technology Growth Capital, which has already taken control of OCZ's depository accounts at Silicon Valley Bank and Wells Fargo Bank, National Association.
OCZ said it has received an offer from Toshiba to acquire substantially all of its assets in a bankruptcy proceeding. The two companies have "substantially completed" negotiations on an asset purchase agreement and OCZ believes that all the material terms have been agreed to.
The agreement is subject to various conditions: the preservation of the value of the business, including the retention of employees, the negotiation and execution of definitive documentation, the filing of bankruptcy petitions by OCZ and certain of its subsidiaries, Toshiba's offer being accepted by the bankruptcy court as the highest and best offer under the circumstances after an auction process conducted under the relevant provisions of the United States Bankruptcy Code, and other customary closing conditions.
OCZ said it expected to file a petition for bankruptcy shortly after completing final documentation with Toshiba and Hercules Technology Growth Capital Inc.
If the Toshiba deal falls through, OCZ will continue with bankruptcy proceedings and liquidate its assets.
OCZ has been battling a shortage of NAND flash memory chips, used in solid state drives, for about a year.
The company said in August it had retained Deutsche Bank AG to help it evaluate strategic options. OCZ had also said it would amend its loan and security agreement with Hercules as the company did not meet certain covenants.
OCZ was also hit by an investigation by U.S. regulators into its accounting practices last year.
OCZ said it has received an offer from Toshiba to acquire substantially all of its assets in a bankruptcy proceeding. The two companies have "substantially completed" negotiations on an asset purchase agreement and OCZ believes that all the material terms have been agreed to.
The agreement is subject to various conditions: the preservation of the value of the business, including the retention of employees, the negotiation and execution of definitive documentation, the filing of bankruptcy petitions by OCZ and certain of its subsidiaries, Toshiba's offer being accepted by the bankruptcy court as the highest and best offer under the circumstances after an auction process conducted under the relevant provisions of the United States Bankruptcy Code, and other customary closing conditions.
OCZ said it expected to file a petition for bankruptcy shortly after completing final documentation with Toshiba and Hercules Technology Growth Capital Inc.
If the Toshiba deal falls through, OCZ will continue with bankruptcy proceedings and liquidate its assets.
OCZ has been battling a shortage of NAND flash memory chips, used in solid state drives, for about a year.
The company said in August it had retained Deutsche Bank AG to help it evaluate strategic options. OCZ had also said it would amend its loan and security agreement with Hercules as the company did not meet certain covenants.
OCZ was also hit by an investigation by U.S. regulators into its accounting practices last year.
