Message #23 From:
NewsBot Date: August 21, 2006 04:03:00 PM
VTSS News Vitesse Semiconductor Rejects Notice of Acceleration of Convertible Subordinated Debentures
CAMARILLO, Calif.--(BUSINESS WIRE)--Aug. 21, 2006--Vitesse Semiconductor Corporation (Pink Sheets:VTSS) announced today that it has received a purported acceleration notice from the trustee for Vitesse's $96.7 million aggregate principal amount of 1.5% Convertible Subordinated Debentures due 2024. Vitesse believes that it is not in default with respect to the Debentures and, therefore, any attempt to accelerate the payment of the Debentures is invalid. Negotiations to resolve the dispute continue with a majority of the holders of the Debentures, who have agreed to instruct the Trustee to forbear from taking any further action with respect to the Debentures for a period of 14 days.
As previously disclosed, the trustee with respect to the Debentures essentially has asserted that a default occurred when Vitesse failed to make its SEC filings on time. Vitesse believes that it has fully complied with its obligations under the indenture for the Debentures and that there is no requirement in that indenture for Vitesse to make its SEC filings in a timely fashion. Thus, Vitesse rejected the trustee's purported notice of default on May 26, 2006, and rejects the trustee's attempt to accelerate payment of the Debentures.
Though Vitesse does not believe there has been a default with respect to the Debentures, it continues to negotiate a resolution with the holders of a majority of the Debentures to avoid the potential costs and uncertainties of a protracted dispute.
"We are disappointed by the decision of the Debenture holders to attempt to accelerate the debt," said Chris Gardner, the CEO of Vitesse. "Vitesse made a good faith offer to resolve this dispute. Unfortunately, the demands by some of the holders of the Debentures have far exceeded anything that we would consider reasonable under the circumstances. We continue to negotiate in good faith for a resolution to this issue, but as we have said, we will not accept a negotiated settlement if we feel it unfair to Vitesse or to our shareholders."
About Vitesse
Vitesse designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for communications and storage networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet LAN, Ethernet-over-SONET, Fibre Channel, Serial Attached SCSI, Optical Transport, and other applications. Vitesse innovation empowers customers to deliver superior products for Enterprise, Access, Metro, and Core applications. Additional company and product information is available at www.vitesse.com.
FORWARD-LOOKING STATEMENTS
This news announcement contains certain forward-looking statements within the meaning of the U.S. securities laws. These statements are based upon current expectations and involve certain risks and uncertainties, including those related to the expected future operating performance of the Company. Forward-looking statements include but are not limited to information preceded by, or that include the words "believes", "expects", "prospects", "anticipates", "could", "estimates", "forecasts", or similar expressions. The reader should note that these statements may be impacted by several factors, including economic changes, increased competition, changes in the semiconductor industry generally, and changes in interest rates. Accordingly, the Company's actual performance and results may differ from those anticipated in the forward-looking statements. Please see the Company's recent public filings for information about these and other risks that may affect the Company. The Company undertakes no obligation to update or revise the information contained herein because of new information, future events, or otherwise.
