Troubled Siliconix Inc has reached an agreement with AEG Aktiengesellschaft, an 80% subsidiary of Daimler-Benz AG, on a proposed reorganisation plan: the plan will be jointly developed by the two companies and submitted by the Santa Clara, California-based company to the Bankruptcy Court for confirmation; the company says that the agreement is a positive step toward Siliconix emerging from Chapter 11 proceedings; the proposed plan provides that AEG would contribute $13m to Siliconix in cash and cancel its $2m secured note; the outstanding equity of Siliconix would be reorganized so that AEG or an affiliate would own 80.1% of the equity on a fully diluted basis, and current shareholders of Siliconix, other than AEG, would own 19.9% of the equity; the agreement also provides that upon confirmation of the plan, Siliconix will have no more than $46.7m in principal amount of indebtedness outstanding on a consolidated basis, and its annual interest expense will not exceed $3.8m; the agreement is further subject to the condition that the plan be confirmed by the Bankruptcy Court no later than Oct 31 1990; AEG has also agreed to provide, at Siliconix’s option, either $6.0m in principal amount of debtor-in-possession financing for working capital and capital expenditures, or a guarantee of such financing to be provided by a responsible third party on terms acceptable to AEG.
