EECO Will Sell Subsidiary Based in Santa Ana : Reorganization: The sale of the computer manufacturer will be a step toward meeting a condition of EECO’s proposed reorganization plan.
EECO Inc., a computer products manufacturer that filed for bankruptcy protection in May, said Friday that it has agreed to sell its hotel-computer manufacturing business to a Hong Kong investor group.
EECO said Dataprep, a company headed by Hong Kong investor Fred Eu, will acquire its EECO Computer Inc. subsidiary in Santa Ana for an undisclosed price. Eu will serve as the company’s chairman and Carl Jeremias will remain as president.
Jeremias said EECO Computer Inc. will retain its 92 employees.
After the sale of the division, EECO would be left with its corporate headquarters here, a keyboard- and switch-manufacturing operation in Scotland and a keypad plant in Phoenix. Each of the manufacturing plants has about 100 employees.
On Aug. 1, EECO sold the assets of its Maxi-Switch Keyboard Division in Tucson, Ariz., to a Taiwanese investment company for an undisclosed price.
Later that month, the company filed a reorganization plan in which it proposed to pay $11 million to its largest creditor, Sanwa Bank in Los Angeles. Of that, $7.5 million would be in cash and $3.5 million would be proceeds of a new loan.
Under the plan, the company also proposes to settle a $6.5-million debt to creditor Gary Beesom by giving him ownership of its Phoenix keypad plant, which it will then lease back, and to settle the remaining $9.5 million in debt by issuing common stock and a $1.1-million note to other unsecured creditors.
Sale of the EECO Computer unit to Dataprep is expected to close in early December.
Divestiture of the subsidiary will be a major step toward meeting a condition of EECO’s proposed reorganization plan, said George B. DeHuff III, EECO chairman. “This generates cash for us,” he said.
Dataprep has been EECO’s Asian market distributor since 1977 and has installed 100 systems in 63 hotels throughout the Far East, including China, Jeremias said.
The company will continue to be based in Santa Ana, he said.
Jeremias said he wants to expand the business with its focus on a new hotel computer-product line based on the Pick operating system and run on either IBM or Digital Equipment Corp. machines.
