AST Finalizes Deal With Samsung for Credit Guarantee

AST Research Inc., struggling with a string of quarterly losses, said Monday it has signed a final agreement with Samsung Electronics Co. for a $200-million, two-year bank credit guarantee in exchange for 500,000 shares of nonvoting preferred stock.

AST also said a previous $200-million bank credit guarantee with Samsung was extended by a year to Dec. 31, 1998, resulting in a credit guarantee of $400 million from Samsung.

The personal-computer maker has experienced declining market share and continued executive turmoil as Samsung, the Irvine company’s largest shareholder, tries to save AST.

Samsung is providing guarantees for a total of $300 million in bank credit effective as of last Friday, which increases to $400 million April 1, 1997, and stays at that level through Dec. 31, 1998.

The AST preferred stock is redeemable beginning in 1999, at AST’s option, for common stock or cash. Each share may then be redeemed by AST for about 13 shares of AST common stock or $100.75. Seoul-based Samsung invested $378 million for a 40% stake in AST earlier this year and raised the stake to 46% in July when it paid off a $90-million note to Tandy Corp. The latest agreement doesn’t change Samsung Electronics’ ownership in AST, the company said.