Spansion likes case progress, exploring asset sale options

By Caroline Salls

Pittsburgh, March 23 - Spansion Inc. said its Chapter 11 cases are progressing well, as the company looks to work with creditors in the coming weeks and months to craft a plan of reorganization and continues to explore its strategic alternatives, including a possible asset sale, according to a company news release.

The company said it is in discussions with multiple companies regarding the potential sale of some or all of its assets.

"The decisions we made to reduce costs were difficult, but necessary," president and chief executive officer John Kispert said in the release.

"As a result of those actions, Spansion expects to meet its post-petition obligations, and is leveraging its global manufacturing facilities to meet customer demand.

"We plan to continue to take the necessary actions to strengthen our cash position, to help enable Spansion to emerge from the Chapter 11 process as a stronger and more focused company."

Spansion posted $468 million in net sales for the quarter ended Dec. 31, according to the release, and it expects to record roughly $400 million in net sales in the first quarter of 2009, driven by sales in telecommunications and gaming segments and advance purchases.

The company said the sales numbers are offset by continued weakness in the overall economy during a quarter that is seasonally down compared to the fourth quarter.

"Despite a troubled economy, Spansion gained segment share in the fourth quarter while keeping average selling prices relatively stable," Kispert said in the release.

"In addition, net sales in the first quarter are an indication of the continued customer demand for Spansion solutions.

Spansion, a Sunnyvale, Calif.-based maker of flash memory products, filed for bankruptcy on March 1 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-10690.

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