Feb. 28 (Bloomberg) -- Conexant Systems Inc., a maker of semiconductors, filed for bankruptcy after negotiating a reorganization plan that involves the sale of the company in exchange for secured debt to creditors including George Soros.
The Newport Beach, California-based company listed assets of $212.7 million and liabilities of about $250 million in Chapter 11 papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
“Unfortunately, a combination of declining revenue, increasing costs and significant debt obligations has caught up with Conexant,” Chief Executive Officer Sailesh Chittipeddi said in court documents.
The company designs and sells microchip sets used for computers and communications devices, and for audio, video, security and imaging functions, according to the filing.
Among Conexant’s largest unsecured creditors listed in court papers are Eastman Kodak Co., owed $2.83 million, and Silterra Malaysia, owed $1.98 million.
Conexant was acquired in April 2011 by Golden Gate Capital Corp. for $282.2 million and plans to be sold to an affiliate of Soros Fund Management LLC in exchange for debt.
Soros Fund Management, headed by the billionaire investor, is a secured creditor holding $195 million in 11.25 percent defaulted senior secured notes. Through the plan, subject to court approval, the debt will be exchanged for new stock and a $76 million unsecured note.
The company blamed bankruptcy on revenue that declined 30 percent in 2011. In addition, Conexant lost its main customer when Kodak filed for bankruptcy. Revenue in 2012 was $135 million, according to a court filing.
A support agreement commits Soros and Golden Gate to court approval of the plan. Soros will finance the bankruptcy with a $15 million loan, court papers show.
The case is In re Conexant Systems Inc., 13-10367, U.S. Bankruptcy Court, District of Delaware (Wilmington).