The U.S. Bankruptcy Court approved Silicon Graphics Inc.'s plan of reorganization this week. The company said the approval sets the stage for its emergence from Chapter 11 in October.
At a hearing on Sept. 19, the court ruled that all the necessary requirements have been met for SGI to implement its plan of reorganization. SGI, known for its high-performance graphics workstations with headquarters in Mountain View, Calif., entered into Chapter 11 bankruptcy protection in May.
"This is a great day for SGI. We have accomplished so much in just five months, reaching our confirmation on the fast track that we expected," said Dennis P. McKenna, CEO and chairman of SGI. "...We have eliminated the legacy debt, improved our liquidity and stabilized the business. We have also taken out significant costs--$150 million on an annualized basis. We have reengineered the company and have a strong leadership team that will be executing this plan."
SGI also said it has received commitments for exit financing. Morgan Stanley Senior Funding Inc. has lent an $85 million term loan and General Electric Capital Corp. has lent a $30 million line of credit. The company said it would use the money to pay off the existing DIP financing, make distributions pursuant to the plan, and provide working capital for the company's ongoing operations.
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