Sorrento Restructuring OK'd
SAN DIEGO --
Sorrento Networks Corp. (Nasdaq:FIBR), a leading supplier of intelligent optical networking solutions for metro and regional applications, announced today that its shareholders overwhelmingly voted in favor of the capital and corporate restructuring plan.
The company's shareholders ratified the restructuring plan at a special shareholder meeting held on May 29, 2003, in San Diego. The company received proxies representing greater than 50% of the shares eligible to vote, constituting a quorum. The proposed capital restructuring was favorably received by a substantial majority of those who cast ballots and all of the propositions passed with votes in favor ranging from 71% to 95%.
"We are very pleased that our shareholders have approved the restructuring plan," stated Phil Arneson, chairman and chief executive officer of Sorrento Networks. "This is truly a landmark achievement and demonstrates the strong confidence that our investors have in Sorrento's future success. I cannot overemphasize how important this is for the company."
Details of the restructuring plan were presented in a proxy statement sent to shareholders on April 15, 2003. Briefly, the agreement provides that $81 million in debt obligations currently on the company's balance sheet (consisting of the company's $32.2 million in convertible bonds and all Series A Preferred shares) will be converted into common shares of the company and into $12.5 million in secured convertible debentures maturing in August 2007. The outstanding Series A "put" of $48.8 million against Sorrento Networks Inc. will be withdrawn. The Senior Convertible Debenture Holders and Series A Preferred Shareholders will receive common shares and new convertible debentures, which, in the aggregate, will represent approximately 87.5% of the company's common stock on a diluted basis. Existing shareholders will retain 7.5% of the common stock of the company on the same diluted basis and will receive non-transferable warrants to purchase approximately 5% of the company's common stock.
The company will reincorporate in Delaware and, post-closing, will simplify its corporate structure by merging its operating and non-operating subsidiaries into a new Delaware corporation. The formal transfer of preferred shares and convertible debentures for common shares is expected to close in early June 2003. An amendment to the Exchange Agreement extending the closing deadline from May 30 to June 6, 2003, has been approved by the requisite percentages of debenture holders and Series A preferred shareholders.
Sorrento Networks Corp.