My news for Investors

AtLeast one of the check box should be selected You are following news about Follow the latest news about MTIC

Download image

    TUSTIN, Calif., Oct. 16 /PRNewswire-FirstCall/ -- MTI Technology
 Corporation (Pink Sheets:   MTIC) announced today that it has reached a
 definitive agreement with Zinc Holdings, LLC, a private equity sponsored
 investment group, pursuant to which, subject to bankruptcy court approval,
 Zinc Holdings will acquire MTI's European operating subsidiaries for
 approximately $5.5 million cash at closing. MTI also announced today that,
 due primarily to continued operational and financial difficulties
 experienced by its U.S. operations, it has filed for bankruptcy protection
 pursuant to Chapter 11 of the U.S. Bankruptcy Code. Since the bankruptcy
 filing covers MTI only, and not its subsidiaries, MTI expects its European
 operating subsidiaries to continue to operate in the ordinary course of
 business pending court approval of their sale to Zinc Holdings. The sale of
 the European operating subsidiaries is expected to close, pending court
 approval and other customary closing conditions, in the fourth quarter of
 2007.
     Thomas P. Raimondi, MTI's CEO and President, stated "After evaluating
 alternatives, we ultimately determined that seeking protection for MTI in
 bankruptcy will provide us with the best path to effect the sale of our
 corporate assets, including the sale of our European operations, and the
 wind down of our operations in an orderly fashion."
     MTI also announced that it had entered into a definitive agreement with
 Zinc Holdings to provide debtor in possession financing to MTI for a
 limited period of time in connection with its bankruptcy proceeding. The
 proposed financing is also subject to court approval and customary
 conditions. All borrowings by MTI under the financing arrangement will
 require the prior approval of The Canopy Group, Inc., MTI's primary
 pre-petition secured creditor and a significant stockholder.
     In connection with its bankruptcy filing, MTI intends to continue to
 cut costs in the United States, including the completion of layoffs of the
 majority of its U.S. workforce while seeking a possible buyer or buyers for
 all or portions of its remaining assets. Following the completion of any
 such sales, MTI intends to liquidate the remainder of its assets in
 appropriate bankruptcy proceedings.
     MTI does not believe that sufficient funds will be available following
 the applicable bankruptcy sales and liquidation to fully satisfy the claims
 of its secured and unsecured creditors. As a result, MTI's equity holders
 would not receive any funds from the bankruptcy estate. MTI intends to
 dissolve following the completion of the applicable bankruptcy proceedings.
     Forward-Looking Statements
     This press release contains forward-looking statements 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. Such
 statements include information regarding the MTI's expectations, goals or
 intentions regarding the future, including, but not limited to, statements
 regarding its expectations and intentions regarding its plans to sell its
 European operating subsidiaries, its intentions regarding continued cost
 reductions, employee layoffs and seeking other buyers for its remaining
 assets. Forward-looking statements involve certain risks and uncertainties,
 and actual results may differ materially from those discussed in any such
 statement. Factors that could cause actual results to differ materially
 include but are not limited to failure to satisfy the conditions to closing
 in the definitive sale agreement, outcomes and developments in MTI's
 bankruptcy proceedings, court rulings in the bankruptcy proceedings,
 litigation, MTI's available financing, MTI's ability to borrow under the
 financing arrangements and obtain all necessary approvals in connection
 therewith, adverse developments in and increased or unforeseen legal and
 other costs, and the possibility that customers and others with whom MTI
 has contracted will terminate or reduce their relationships with MTI.
 Additional factors that could cause actual results to differ are discussed
 under the heading "Risk Factors" and in other sections of MTI's Form 10-K,
 as amended, for the fiscal year ended April 7, 2007, which is on file with
 the SEC, and in its other current and periodic reports filed from time to
 time with the SEC. All forward-looking statements in this document are made
 as of the date hereof, based on information available to MTI as of the date
 hereof, and MTI assumes no obligation to update any forward-looking
 statement.
     Contact:
     Scott Poteracki
     Chief Financial Officer
     949-885-7300
     spoteracki@mti.com
 
     (Logo:  http://www.newscom.com/cgi-bin/prnh/20051010/LAM084LOGO)
 
 

SOURCE MTI Technology Corporation