Lenders Take Over MAI’s European Subsidiaries : Restructuring: The troubled Tustin-based company says the move clears it of $84 million in debt owed to U.S. and Canadian banks.
MAI Systems Corp., struggling to pull itself out of a financial mire that has all but bankrupted the software company, said on Monday that its lenders have taken over ownership of its European subsidiaries.
In a statement released late Monday, the company said that the action has relieved it of $84 million in debt owed to U.S. and Canadian banks that it did not identify. Company officials were unavailable for comment.
In a prepared statement, President Peter S. Anderson said: “Now that our secured bank debt has been satisfied, we intend to focus our attention on settling our outstanding trade and other indebtedness and improving the operating performance of our remaining business.”
The statement did not make clear if the transaction, which involved a transfer of the European subsidiaries’ stock, was a negotiated deal or a foreclosure.
The company said it hopes that the transaction will give it a financial boost. In the past year the firm has lost $187 million, defaulted on $77 million in debt and laid off 564 workers. It now employs about 2,000 at its Tustin headquarters.
The company said in its statement that spinning off the European subsidiaries will mean a gain of $65 million because MAI will rid itself of the debilitating bank debt.
The restructured company, which expects annual revenue of $103 million, consists of four independent business units operating primarily in North and South America, together serving 11,000 customers.
MAI’s stock closed at 12.5 cents a share, unchanged, in Monday’s trading on the New York Stock Exchange.
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