MIAMI, May 21 /PRNewswire-FirstCall/ -- All American Semiconductor, Inc. (Pink Sheets: SEMI.PK), a distributor of semiconductors and other electronic components, announced today the approval of its debtor in possession financing by the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, on Thursday, May 17, 2007, based on an agreement reached among All American, Harris N.A., as agent for the lenders, and the Official Committee of Unsecured Creditors. An order approving the financing is expected to be entered today.
The Court-approved final DIP financing of up to $25 million is expected to provide the Company with sufficient liquidity to continue operations during the Chapter 11 case.
The agreement on financing provides, among other things, that any administrative expense claim of the DIP lenders will be subordinate to the first $750,000 in proceeds of unencumbered assets, and the DIP lenders will be entitled to recover on account of their administrative expense claims the next $5.5 million of proceeds of unencumbered assets, and 50% of any such proceeds in excess of $20 million. Under no circumstances will the DIP lenders receive proceeds of any avoidance actions. The creditors committee also agreed to withdraw its motion to convert the case to chapter 7 or to appoint a chapter 11 trustee and to withdraw with prejudice its appeal of the Court's order authorizing sale and bidding procedures for the sale of substantially all of All American's assets.
Based on the settlement, All American is continuing with all pre-sale activity, moving toward sale and closing dates previously approved by the Court.
"I am very pleased that a mutually acceptable agreement was reached among our company, our lenders and the creditors committee," said Bruce Goldberg, President and CEO of All American. "We may now proceed with the sale process previously approved by the Court."
The approved sale process provides for interested purchasers to complete due diligence and submit binding bids by May 28, 2007, with the auction scheduled for May 31st at the Miami offices of the Company's counsel, Squire, Sanders & Dempsey, L.L.P. The hearing to approve a sale to the highest bidder at the auction is scheduled for June 5, 2007, with the sale closing no later than June 8.
On April 25, 2007, All American filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. The filing included the Company's 33 subsidiaries in the United States, Canada, Mexico, Europe and Asia. All American determined to file for relief under Chapter 11 after extensively exploring and carefully evaluating all of its options. All American believes that the Chapter 11 process provides the best alternative for maximizing the value of the Company for the benefit of its stakeholders including suppliers, customers and employees.
About All American Semiconductor, Inc.
All American is a Delaware corporation with its principal place of business in Miami, Florida. It also maintains corporate offices for West Coast operations in San Jose, California. All American is a distributor of electronic components manufactured by others. The Company distributes a full range of semiconductors including transistors, diodes, memory devices, microprocessors, microcontrollers, other integrated circuits, active matrix displays and various board-level products. All American also distributes passive components such as capacitors, resistors and inductors; and electromechanical products such as power supplies, cable, switches, connectors, filters and sockets. All American also offers complete solutions for flat panel display products. In total, the Company offers approximately 40,000 products produced by approximately 60 manufacturers. These products are sold primarily to original equipment manufacturers in a diverse range of industries such as manufacturers of computers and computer-related products, networking, satellite, wireless and other communications products; Internet infrastructure equipment and appliances; automobiles and automotive subsystems; consumer goods; voting and gaming machines; defense and aerospace equipment; and medical instrumentation. The Company also sells products to contract electronics manufacturers who manufacture products for companies in all electronics industry segments.
"FORWARD-LOOKING" STATEMENTS DISCLAIMER
This press release contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "expected," "intends, "may," "will," "shall," and similar expressions, to the extent used, are intended to identify the forward- looking statements. In addition, to the extent that this press release makes statements about or refers to the Chapter 11 bankruptcy filing and results or effects thereof, DIP financing from the Company's existing bank group and the extent to which the Company may be able to continue operations during the Chapter 11 case using the proceeds thereof, a sale of the Company's and its subsidiaries' assets, unencumbered assets, or any other transaction, or otherwise makes statements about or refers to future expectations, beliefs or intentions about the Company's future operations, such statements are forward- looking statements. All forward-looking statements are subject to a number of risks and uncertainties that could cause actual results, performance, achievements or transactions to differ materially from the statements made. Factors that could adversely affect the Company's future results, performance, achievements or transactions include, without limitation: failure of the Company to obtain competing bids, or any bid at all, for the purchase of its assets; if the Company receives one or more bids for the purchase of its assets, the failure of the price or other terms of such bid(s) to be acceptable to the Company, the Company's bank group or the Bankruptcy Court; failure of the Company to otherwise obtain Bankruptcy Court approval of any sale of its assets or any other transactions or activities involving the Company; the ultimate determination of which of the Company's assets are unencumbered by the existing bank group's pre-bankruptcy lien; the Company's failure to access sufficient funds from the Bankruptcy Court approved DIP financing to provide it with funding to facilitate the Chapter 11 bankruptcy process and the approved sale process; the Company's inability to satisfy the subsequent conditions that would allow it to continue to access additional DIP financing from its lenders; the ability of the Company to operate while it attempts to complete a sale of its assets; the Company's ability to preserve the value of its assets while it attempts to complete a sale of its assets; the Company's failure to find one or more purchasers of its assets that will continue to be financially sound and in a stronger position than the Company to employ its employees on an on-going basis; further and continuing deterioration in the Company's relationships with existing suppliers and customers; further voluntary or involuntary reductions of the Company's workforce; and other uncertainties, risks and factors, including those described in the Company's prior SEC reports and filings and other press releases. These risks and uncertainties are beyond the ability of the Company to control. In many cases, the Company cannot predict the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. The Company undertakes no obligation to update publicly or revise any forward-looking statements, business risks and/or uncertainties.
