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Vitesse Semiconductor solicits consents to amend 1.5% convertible debentures
By Laura Lutz
Des Moines, Oct. 23 - Vitesse Semiconductor Corp. began a consent solicitation for all of its $96.7 million of 1.5% convertible subordinated debentures due 2024.
If the company receives the necessary consents, the debenture holders and trustee would agree not to take any action against the company related to reporting requirements for 18 months. The company would also agree not to repay the debentures under a disputed acceleration request sent by the trustee during the last six months of the forbearance period.
Under the proposed amendments, the conversion price of the debentures would be permanently lowered to $2.546 per share from $3.92 per share, subject to further adjustment as described in the indenture.
The repurchase price for the Oct. 1, 2009 redemption right would be increased to 113.76%, from 100%, of the principal amount plus accrued interest.
The consent solicitation will expire at 5 p.m. ET on Nov. 3.
On June 5, the company said it received notice from U.S. Bank NA, indenture trustee for the debentures, of indenture compliance deficiencies for failure to file its annual reports with the trustee within 15 days of filing the reports with the Securities and Exchange Commission.
As previously reported, the company had 60 days from May 26 to cure the deficiencies or an event of default would occur under the indenture.
On Aug. 21, Vitesse said that it received an acceleration notice from the trustee. The company said that it believed it was not in default on the debentures.
Vitesse is a Camarillo, Calif.-based designer, developer and marketer of semiconductor services for communications and storage networks.
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