Syntax-Brillian Announces Asset Purchase Agreement, Files Voluntary Petition for Chapter 11 Reorganization to Facilitate Sale
08 July 2008 - 4:45PM
Business Wire
Syntax-Brillian Corporation (Nasdaq: BRLC), a leading manufacturer
and marketer of LCD HDTVs, digital cameras and consumer electronics
products, today announced that, pending court approval, it has
entered into an asset purchase agreement to sell certain of its
assets to a newly-created company, Olevia International Group, LLC,
which is under common ownership with TCV Group. TCV Group is one of
Syntax-Brillian's original partners for industrial and mechanical
design and it provides the plastic injection molded parts for the
Olevia branded high-definition widescreen LCD televisions. Under
the terms of the transaction, in exchange for the purchased assets,
Olevia International Group has agreed to assume $60.0 million of
Syntax-Brillian's secured debt. Concurrent with this announcement,
Syntax-Brillian filed a voluntary petition for relief under Chapter
11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware. The Company filed a
motion pursuant to Section 363(f) of the Bankruptcy Code to seek
Bankruptcy Court approval for the sale. The proposed sale is
subject to higher and better offers, bankruptcy court approval and
other conditions customary in a transaction of this type. The
Company anticipates closing this transaction by August 31, 2008.
"Following a careful review of all of our alternatives,
Syntax-Brillian�s management and Board of Directors � working in
close consultation with outside legal and financial advisors �
unanimously determined that a sale, expedited through the Chapter
11 process, represents the best long-term solution for our retail
partners, suppliers, employees and consumers,� said Gregory F.
Rayburn, Interim Chief Executive Officer at Syntax-Brillian. �This
process will allow us to operate business as usual, even as we
address liquidity and leverage issues experienced in the past year.
It will allow us to honor our commitments to our retail partners,
suppliers, employees and consumers, continue to advance initiatives
that improve and develop our product lines, and better position us
to capitalize on the demand for our products going forward.� �We
believe the proposed transaction would enable us to stabilize our
business and execute on our growth prospects,� Mr. Rayburn
continued. �Moreover, we believe the purchaser would gain a
competitive advantage by being the first in the LCD TV industry to
unite design, sourcing, manufacturing and delivery of HDTV products
under common ownership.� The Chapter 11 filing includes all of
Syntax-Brillian�s subsidiaries with the exception of Vivitar, the
Company�s brand of digital still and video cameras. Syntax-Brillian
has initiated a process for the sale of Vivitar, which will occur
separately from the Chapter 11 filing announced today. In the
interim, Vivitar continues to conduct business as usual.
Syntax-Brillian intends to continue normal business operations at
all of its facilities, consistent with its obligations as a Chapter
11 debtor-in-possession (DIP) under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions
of the Bankruptcy Code. The Company is currently in negotiations
with lenders to secure DIP financing, which will provide the
working capital and financial resources necessary to fund the
transition to new ownership. The Company is seeking, and expects to
receive, approval for a variety of first day motions, including
requests to make wage and salary payments, honor existing employee
benefits, continue certain customer programs and pay suppliers for
goods and services delivered after July 8, 2008. NASDAQ Delisting
Expected The Company also announced today that on July 1, 2008, it
received a letter from the Nasdaq Stock Market notifying the
Company that for the last 30 consecutive trading days its common
stock has closed below the minimum $1.00 per share requirement for
continued inclusion under marketplace rule 4450(a)(5).
Syntax-Brillian has been provided 180 calendar days, or until
December 29, 2008, to regain compliance. Due to filing a voluntary
petition for relief under chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court, the Company
does not intend to attempt to regain compliance with this
marketplace rule and expects that its common stock will be delisted
from the Nasdaq Global Market within the next 10 days.
Syntax-Brillian expects that shares of its common stock will have
no value as a result of the reorganization and subsequent
transaction. Management and Board Changes The Company also
announced today the resignation of several directors. Effective
June�30, 2008, Vincent F. Sollitto, Jr, James Ching Hua Li, Bruce
Berkoff, David Chavoustie, Yasushi Chikagami, and Max Fang,
resigned as directors of the Company. Following these resignations,
Michael Garnreiter constitutes the sole member of the Board of
Directors. Furthermore, on July 2, 2008, the Board of Directors
terminated James Ching Hua Li as President and Chief Executive
Officer. Gregory F. Rayburn remains Interim Chief Executive Officer
of the Company. About TCV Group: TCV Group is one of
Syntax-Brillian�s original partners for industrial and mechanical
design and provides plastic injection molded parts for Olevia
branded high-definition widescreen LCD televisions. It is currently
one of the OEM/ODM partners for Syntax-Brillian, manufacturing LCD
televisions using its own vertical integrated facilities within TCV
Group and its strategic partners in the LCD TV industry. About
Syntax-Brillian: Syntax-Brillian Corporation
(www.syntaxbrillian.com) is one of the world's leading
manufacturers and marketers of LCD HDTVs, digital cameras, and
consumer electronics products. The Company's lead products include
its Olevia(TM) brand (www.Olevia.com) high-definition widescreen
LCD televisions -- one of the fastest growing global TV brands --
and Vivitar brand (www.vivitar.com) digital still and video
cameras. Syntax-Brillian has built an Asian supply chain coupled
with an international manufacturing and distribution network to
support worldwide retail sales channels and position the Company as
a market leader in consumer digital entertainment products.
Forward-looking Statements: Certain statements contained in this
press release may be deemed to be forward-looking statements under
federal securities laws, and Syntax-Brillian intends that such
forward-looking statements be subject to the safe harbor created
thereby. Syntax-Brillian cautions that these statements are
qualified by important factors that could cause actual results to
differ materially from those reflected by the forward-looking
statements contained herein. Such factors include changes in
markets for the Company's products; changes in the market for
customers' products; the failure of the Company's products to
deliver commercially acceptable performance; the ability of the
Company's management, individually or collectively, to guide the
Company in a successful manner; and other risks detailed in
Syntax-Brillian's Annual Report on Form 10-K for the fiscal year
ended June 30, 2007 and subsequent filings with the Securities and
Exchange Commission. Brillian and Vivitar are trademarks or
registered trademarks of Syntax-Brillian Corporation. All other
trademarks are the property of their respective owners.
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