As reported on Friday CI No 1,583), Concurrent Computer Corp of Tinton Falls, New Jersey has fallen prey to an petition to put the company into involuntary bankruptcy under Chapter 11 of the federal code, which has been filed by three of its bondholders. The holders say they took this action in order to maintain the positions of the holders and the bank group during the debt restructuring negotiation period – they fear that their interests will be subordinated to those of the banking group as Concurrent tries to satisfy its bankers and negotiate a new loan agreement. It now has up to 20 days, unless extended, to respond to this petition. Last autumn Concurrent revealed that it was unable to satisfy all the financial covenants of its new bank credit agreement (CI No 1,513) – it currently has around $55m owed in senior bank debt, $110m in subordinated debt outstanding. However, the banks extended Concurrent’s existing informal grace period indefinitely to enable the company to complete its revised business plans and capital restructuring proposal, a proposal that has not yet been made public. The company’s most recent published results revealed first quarter net losses of $10m – a loss that had grown from $1.6m the year before – on turnover down 20% to $70m (CI No 1,544). The current head of Concurrent Computer Corp – a company that was created on a buyout from Perkin Elmer Corp which then acquired Massachusetts Computer Corp – Denis Brown, said that he will intensify negotiations with the shareholder committee and the banks to develop a recapitalisation deal. He added that second quarter results reflect the company’s achievement in exceeding its order goals and is confident that Concurrent can return to profitability following a successful debt restructuring. Brown also said that the company has proposed that the restructured shareholder debt be subordinated to its existing lines of international bank debt.
