[Tig] SGI

Jamie jamie
Tue May 9 00:51:16 BST 2006

Thanks to oktobor for supporting the TIG
Apparently their servers are being hammered. Here's the press release if
anyone cares.


SGI Takes Action to Reduce Debt

SGI Announces Pre-Negotiated Reorganization

MOUNTAIN VIEW, Calif., (May 8, 2006)-Silicon Graphics (OTC: SGID) today
announced that it has reached an agreement with all of its Senior Secured
bank lenders and with holders of a significant amount of its Senior Secured
debt on the terms of a reorganization plan that will reduce its debt by
approximately $250 million, greatly simplifying its capital structure.

As part of this agreement with many of its major stakeholders, and as the
next step in its previously announced plan to reorganize its businesses, the
Company and its U.S. subsidiaries have filed voluntary petitions under
chapter 11 of the U.S. Bankruptcy Code. SGI's non-U.S. subsidiaries,
including European, Canadian, Mexican, South American and Asia Pacific
subsidiaries were not included in the filing; will continue their business
operations without supervision from the U.S. courts; and will not be subject
to the requirements of chapter 11. The Company expects to file its Plan of
Reorganization reflecting the agreement shortly, and to emerge from Chapter
11 within six months.

"We want to assure our customers, our employees and our communities that SGI
is operating-business as usual," Dennis P. McKenna, the recently appointed,
Chairman and CEO of SGI, stated. "Our customers can continue to rely on SGI
for its mission-critical products, services, and support."
This reorganization is planned with no disruption to day-to-day customer and
partner activities as the Company positions itself to recapture mindshare
and market share. Over the last 100 days, the Company under the leadership
of its new management team has had several significant achievements. During
this time it has:

    * Assembled a new management team including a new Chief Executive
Officer and Chief Financial Officer, as well as the appointment of other
experienced executives;
    * Closed on some significant sales orders reflecting continued customer
confidence in SGI;
    * Completed a program that has resulted in $100 million in annualized
cost savings with an additional $50 million in savings underway;
    * Identified additional paths to streamline operating and administrative
    * Improved efficiencies in its manufacturing operations;
    * Strengthened and expanded its product roadmap; and
    * Implemented a plan to reposition its product and market focus to take
advantage of the Company's significant technology and market potential.

"This is a necessary and responsible step that will strengthen the Company
and foster a sustained turnaround at SGI. This milestone marks a fundamental
and comprehensive change," McKenna continued. "Our customers and partners
want the Company to succeed because of the value SGI continues to bring to
the disciplines and capabilities of discovery, innovation, engineering and
information transformation which are at the center of the world's
achievements and business processes."

"We expect to proceed quickly and will emerge from these proceedings with a
significantly improved balance sheet and, as a result, greater operating
flexibility. I am confident in SGI's future. The new direction I have set is
comprehensive, the product portfolio we will unveil is expansive and our
dedication to customer satisfaction is unwavering," McKenna added.

Certain holders of the Company's existing Senior Secured notes are providing
SGI with a $70 million financing facility. The Senior Secured notes
represent a majority of the Company's total outstanding debt. Subject to
court approval, the proceeds from the financing together with cash generated
from daily operations and cash on hand, will be used to paydown a portion of
SGI's pre-petition debt and to fund operating expenses including
post-petition supplier payments, employee wages and benefits, and other
operating expenses.

The agreement contemplates that the Company's existing Senior Secured
bondholders will be converting their existing debt into the new equity of
SGI and, through a rights offering, will have the opportunity to purchase
$50 million of additional new equity. The $50 million rights offering is
being backstopped by certain of these bondholders to ensure that the Company
raises the full $50 million of new equity capital. It is contemplated that
the $50 million of new capital will be used to reduce debt and further
enhance the Company's liquidity.

Upon confirmation of the plan, the new common stock of the Company will be
issued to the holders of SGI's Senior Secured bonds in the manner described
above. All of SGI's existing common stock and the unsecured subordinated
debentures will be cancelled upon confirmation of the plan by the court and
receive no recovery. Accordingly, the Company believes that SGI's currently
outstanding common stock and unsecured subordinated debentures have no

McKenna concluded by stating "We regret the effect that this will have on
SGI's shareholders and other unsecured creditors. SGI plays a critical role
in the world's infrastructure. This needs to be preserved."

SGI's principal bankruptcy counsel is Weil, Gotshal & Manges LLP.

The filings were made today in the U.S. Bankruptcy Court for the Southern
District of New York.

More information about SGI's reorganization is available on the Internet at

Forward-Looking Statements
This news release contains forward-looking statements relating to future
events or expected financial performance that involve risks and
uncertainties. Factors that might cause such a difference include, but are
not limited to: the effects of our chapter 11 filing; our ability to
maintain adequate liquidity; and our ability to obtain and maintain normal
terms with customers, suppliers and service providers. These and other risks
are or will be detailed from time to time in SGI's periodic reports that are
filed with the Securities and Exchange Commission, including the Form 8K's
filed today in conjunction with this announcement (and other announcements)
and SGI's quarterly report on Form 10-Q for the quarter ended December 30,
2005. Silicon Graphics is under no obligation to publicly update or revise
any forward-looking statements, whether changes occur as a result of new
information, future events or otherwise.

SILICON GRAPHICS | The Source of Innovation and DiscoveryT
SGI, also known as Silicon Graphics, Inc. (OTC: SGID), is a leader in
high-performance computing. SGI helps customers solve their computing
challenges, whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies for
homeland security and defense, enabling the transition from analog to
digital broadcasting, or helping enterprises manage large data. With offices
worldwide, the company is headquartered in Mountain View, Calif., and can be
found on the Web at www.sgi.com.

Silicon Graphics, SGI, the SGI cube and the SGI logo are registered
trademarks and The Source of Innovation and Discovery is a trademark of
Silicon Graphics, Inc., in the United States and/or other countries
worldwide. All other trademarks mentioned herein are the property of their
respective owners.

Tig list - http://tig.oktobor.com/mailman/listinfo/tig
TIG wiki: http://tig.colorist.org/wiki

More information about the Tig mailing list