News

14 August 2009

 

Aviza agrees to sell assets to Sumitomo Precision Products

After signing a non-binding letter of intent in May, etch and deposition equipment maker Aviza Technology Inc and its subsidiaries Aviza Inc and Trikon Technologies Inc have entered into a definitive agreement to sell to Japan’s Sumitomo Precision Products Co Ltd (SPP) substantially all assets related to its system, service, parts, spares and upgrade businesses for batch thermal products and technologies, atmospheric-pressure chemical vapor deposition (APCVD) products and technologies, physical vapor deposition (PVD) products and technologies, chemical vapor deposition (CVD) products and technologies, and plasma etch products and technologies, as well as its service, parts, spares and upgrade business for atomic layer deposition (ALD) products and technologies.

Aviza’s headquarters and batch systems manufacturing facilities in Scotts Valley, CA, USA and the property on which they are located are not included in the sale. However, SPP, which is the parent company of plasma etch and deposition equipment maker Surface Technology Systems plc (STS) of Newport, Wales, UK, has agreed to assume certain liabilities of Aviza and its subsidiaries, including the lease for Aviza’s facility in Newport, Wales and about $5m of operating liabilities.

In exchange for the above assets, SPP has agreed to pay Aviza:

• about $15m in cash at closing, subject to certain adjustments;

• a recourse promissory note with an aggregate principal amount of $10m that will bear interest at the prime rate, will mature 18 months after the closing date, will be secured by the purchased accounts receivable and inventory and certain purchased intellectual property, will be subject to mandatory monthly prepayments of principal to the extent that SPP's collection of accounts receivable and sales of inventory securing the note (subject to certain adjustments) exceed $10m, and will be guaranteed by SPP; and

• a non-recourse promissory note with an aggregate principal amount that will be finalized after the closing date but which Aviza currently expects to be about $31.5m that will not bear interest, will mature 18 months after the closing date, will be secured by the purchased accounts receivable and inventory, and will be subject to mandatory monthly prepayments of principal to the extent that SPP’s collection of accounts receivable and sales of inventory securing the note (as adjusted) exceed $20m. On the maturity date, SPP will have the option of either repaying the outstanding principal amount of the non-recourse note in full or returning any remaining uncollected accounts receivable and unsold inventory to Aviza.

Aviza’s board of directors has unanimously approved the agreement and the transactions (which are subject to approval by the US Bankruptcy Court and other customary closing conditions). On 20 May United Commercial Bank sent Aviza a demand to pay an outstanding debt of about $29.5m. Aviza was in default of an April 2007 loan and security agreement that had already been amended twice last September/October. Subsequently, on 9 June, Aviza Technology Inc and its subsidiaries Aviza Inc and Trikon Technologies Inc filed a voluntary petition under Chapter 11 of the US Bankruptcy Code.

Aviza expects that the proceeds of the sale will be used to repay the lenders under its secured credit facility and its unsecured creditors. The firm does not expect to be able to pay its unsecured creditors in full, so it does not believe that holders of its common stock will receive any proceeds from the transactions.

See related items:

Aviza receives NASDAQ delisting notice

Aviza files for Chapter 11 bankruptcy protection

Bank calls in Aviza’s $29.5m debt

Aviza slashes March-quarter revenue guidance

Search: Aviza PVD ALD Etch Surface Technology Systems

Visit: www.aviza.com

Visit: www.stsystems.com