OTTAWA, June 4 /CNW Telbec/ - Zarlink Semiconductor Inc. (NYSE/TSX:ZL)
today announced that it has agreed with other rights holders to modify its put
right in Mitel Networks Corporation ('Mitel') shares.
In conjunction with its sale of the Systems Business in Fiscal 2001,
Zarlink Semiconductor obtained ownership of 10 million common shares of Mitel.
In Fiscal 2002, Zarlink acquired a put right on its shares as a result of
conditions obtained by a new investor in Mitel. On May 10, 2006, Mitel filed a
registration statement with the SEC and a preliminary prospectus with Canadian
securities regulators in preparation for an initial public offering. On
July 14, 2006, Zarlink, along with other investors, agreed to postpone its put
right in Mitel shares from September 1, 2006 to May 1, 2007.
On April 26, 2007, Mitel announced a proposed merger agreement with
Inter-Tel (Delaware) Incorporated ('Inter-tel'). In contemplation of Mitel's
proposed merger transaction with Inter-Tel, and Mitel's related refinancing
arrangements, Zarlink and other put right holders have agreed to amend their
Zarlink's put right is amended to provide that between May 2, 2007, and
November 1, 2007, Zarlink will only exercise its put right at a price of
US$1.29 per share if and when the proposed merger transaction and related
refinancing by Mitel closes. If the merger transaction has not been completed
on or prior to November 1, 2007, Zarlink's put right is exercisable for
90 days following November 2, 2007, at a price of Cdn$2.85 per share, which
represents the original put right price and exercise period.
Zarlink's put right continues to be only exercisable in conjunction with,
or upon agreement with, Mitel's other put right holders. If the put rights
were to be exercised, Zarlink would not have first payment priority as other
secured liability holders and other put right holders have priority in payment
over Zarlink. Zarlink also understands that Mitel currently has insufficient
funds to satisfy both its secured liabilities and obligations to all put
holders. Zarlink therefore estimates the current fair value of its put right
to be nil.
Zarlink continues to carry the Mitel shares on its books at no value,
therefore any proceeds received on the sale of this investment would result in
both a gain on sale of investments, and a cash inflow in the period of the
About Zarlink Semiconductor
For over 30 years, Zarlink Semiconductor has delivered semiconductor
solutions that drive the capabilities of voice, enterprise, broadband and
wireless communications. The Company's success is built on its technology
strengths including voice and data networks, optoelectronics and ultra
low-power communications. For more information, visit www.zarlink.com.
Shareholders and other individuals wishing to receive, free of charge,
copies of the reports filed with the U.S. Securities and Exchange Commission
and Regulatory Authorities, should visit the Company's web site at
www.zarlink.com or contact Investor Relations.
Certain statements in this press release constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance, or achievements expressed or implied by such
forward-looking statements. Such risks, uncertainties and assumptions include,
among others, the following: our dependence on the successful development and
market introduction of new products; our ability to successfully integrate
businesses acquired in the future; our ability to operate profitably and
generate positive cash flows in the future; our dependence on our foundry
suppliers and third-party subcontractors; order cancellations and deferrals by
our customers; and other factors referenced in our Annual Report on Form 20-F.
Investors are encouraged to consider the risks detailed in this filing.
Zarlink and the Zarlink Semiconductor logo are trademarks of Zarlink
For further information:
For further information: Ed Goffin, Media Relations, (613) 270-7112,
firstname.lastname@example.org; Mike McGinn, Investor Relations, (613) 270-7210,