Asyst Technologies to follow Japanese subsidiaries into bankruptcy

By Caroline Salls

Pittsburgh, April 20 - Asyst Technologies, Inc. said Monday that it expects to file for Chapter 11 bankruptcy, and the company's Japanese subsidiaries, Asyst Technologies Japan Holdings Co., Inc. and Asyst Technologies Japan, Inc., entered into related voluntary proceedings under Japan's Corporate Reorganization Law, according to a company news release.

As a result of the global economic recession, Asyst said demand for semiconductor manufacturing equipment has declined dramatically, and the company has undertaken significant efforts over the last several months to reduce its expense structure and working capital requirements in response to these unprecedented conditions.

The company said these efforts have included significant decreases in non-labor expenses, work force reductions, executive salary cuts, reductions in benefits and mandatory time off.

However, Asyst said recent delays in customer projects and related cash collections, a constriction in available borrowing from lenders, acceleration of vendor payment obligations and inability to generate sufficient cash flow or identify new sources of liquidity have caused the company to seek bankruptcy protection in order to be better able to manage its operations through a restructuring process.

While in bankruptcy, the company said it intends to sell its assets or move forward with another strategic alternative that will maximize value for all constituencies.

Asyst said it will request court approval to use the cash collateral of KeyBank NA, and the company is evaluating sources of debtor-in-possession financing to provide additional liquidity.

According to the release, the bankruptcy filing constitutes an event of default under Asyst's senior secured term and revolving credit agreement with KeyBank and under lines of credit from Japanese banks, and the defaults resulted in automatic acceleration of the loans.

Asyst develops automation products for the semiconductor industry and is located in Fremont, Calif.

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