Tandon Seeks $12 Million for Disk-Drive Venture

Tandon said it expects to receive a $12-million loan from Western Digital, an Irvine manufacturer of controller boards, as part of a joint venture to make disk drives.

Ranjit Sitlani, executive vice president for the Chatsworth maker of IBM-compatible personal computers and disk drives, said terms of the loan would be secured by Tandon disk drives and technology.

Tandon has been short of cash because of its expansion last year into the personal computer business.

The company previously sought loans from business partners. Last year, for example, it borrowed $4 million from Xerox. Xerox has since agreed to take 1.4 million shares of Tandon stock in lieu of being paid back.

Western Digital makes controller boards that manage a computer’s disk drives--devices that store and retrieve data--for a computer’s central processing unit.

Tandon and Western Digital plan to build equipment that includes both a disk drive and controller board in a single unit that will store information on disks.