Conexant Systems, Inc. (CNXT) recently announced that it has completed the previously announced planned redemption of the remaining $61.4 million of outstanding aggregate principal amount of its floating rate senior secured notes due in November 2010.
The total aggregate redemption amount paid was $62.3 million, including accrued interest. The company funded the redemption with cash on hand.
Earlier, the company retired an aggregate amount of $80 million of its senior secured notes due in November 2010.
Conexant also entered into a new credit facility of $15 million with Silicon Valley Bank through November 30, 2010. The company had earlier raised $21.2 million by offering 8,050,000 shares to the public.
As of October 2, 2009, the company had a total debt of $340.0 million and cash and equivalents of $125.4 million. As a result of this retirement of debt, Conexant will reduce its annual interest burden by more than $5 million.
While Conexant continues to face challenges with eroding sales in WLAN, a flattening ADSL market and declining revenue in its modem business, new management is making drastic changes to overhaul the company’s strategic positioning and return to profitability.
Management undertook significant restructuring activities to transform the business into a smaller but profitable enterprise. In August 2009, the company divested its Broadaband Access Product lines. The company also terminated new investments in wireless networking and divested its Broadband Media Processing business. Management will now target acquisitions to strengthen its product portfolio.
Headquartered in Newport Beach, California, Conexant Systems designs and develops semiconductor solutions that enable consumers to access the digital world.
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