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Vitesse Declares Extension to Forbearance Agreements

Posted on: Sun, 18 Oct 2009 22:10:00 EDT

Symbols: VTSS

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Oct 18, 2009 (Close-Up Media via COMTEX) --
VTSS | Quote | Chart | News | PowerRating -- Vitesse Semiconductor, a provider of integrated circuit solutions for Carrier and Enterprise networks, announced it has extended the date of the forbearance agreements with the holders of more than 98.8 percent of its 1.5 percent Convertible Subordinated Debentures due 2024 (2024 Debentures) and with the holder of Vitesse's $30.0 million senior secured loan.

The forbearance agreements extend the time for Vitesse to negotiate a restructuring of its indebtedness. Under the terms of these forbearance agreements the holders of over 98.8 percent of the 2024 Debentures and the lenders for the senior secured loan have agreed to forbear from pursuing any remedies with respect to the collection of the 2024 Debentures or the senior secured loan until 12 pm (EDT) on October 16.

Vitesse and the holders of the 2024 Debentures and the lenders of the senior secured loan are actively negotiating the terms of a potential restructuring arrangement of the 2024 Debentures and the senior secured loan with the objective of reaching agreement by the end of the forbearance period. Vitesse has agreed to pay the forbearing holders of the 2024 Debentures interest at the annual rate of 15.0 percent for the period from October 1, to the end of the forbearance period, subject to the right to have this forbearance interest waived under certain conditions.

Any restructuring arrangement of Vitesse's 2024 Debentures and senior secured loan is subject to negotiation and execution of definitive agreements. Until such definitive agreements are negotiated in their entirety and executed, there can be no assurance that any debt restructuring will be completed by the end of the forbearance period or at all. In the event that Vitesse is not able to successfully negotiate and complete a debt restructuring, Vitesse intends to explore all other restructuring and reorganization alternatives.

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