October 17, 2006 4:40 PM PDT
SGI exits bankruptcy protection
The Mountain View, Calif.-based company, once a Silicon Valley icon, eliminated its long-term debt and raised $115 million to help it through the transition out of bankruptcy protection. The funding arrangements, through Morgan Stanley Senior Funding and General Electric Capital, also include an $85 million loan and a $30 million revolving line of credit, the company said.
After years of struggles, SGI got a new chief executive, Dennis McKenna, in January, laid off 12 percent of employees in March and entered bankruptcy protection in May. A court approved the company's exit from bankruptcy protection in September.
"In these past six months, everyone at SGI has worked intensely to remake the organization into one engineered for stability and growth with innovative new products targeting the largest market opportunities in the history of the company," McKenna said in a statement.
Among the changes afoot at the company, SGI has added lower-end cluster computing systems using servers with Intel's Xeon processor and plans to tackle new business markets, for example mining corporate data for useful trends or selling servers with very large memory capacity.
In addition, the company has pared down its product line, dropping machines using its MIPS processors and Irix operating system and focusing on those using Intel Xeon and Itanium processors and the Linux operating system instead.
McKenna and James McDivitt remain on the company's board, but there are several new members: Eugene Davis, chairman and CEO of Pirinate Consulting Group; Anthony Grillo, founder and CEO of American Securities Advisors; Kevin Katari, managing member of Watershed Asset Management; and Chun Won Yi, an associate of the Quadrangle Group.
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