New CEO announced for Enablence
The committee running Enablence has designated recently appointed board member Louis De Jong as the company’s new chief executive.
At the same time, Enablence succeeded in several financial maneuvers aimed at alleviating at least some of the financial pressure on the company, which has been struggling as of late.
The company also issued the latest update on a new product aimed at the rapidly growing optical networking market in China, a report meant to demonstrate that it has a clear path toward achieving financial stability.
That news was counterbalanced by an announcement that a previously announced joint venture to develop, manufacture and sell 40G/100G communication modules based on Enablence's PLC-based photonic integrated circuit technology has been terminated. The company said it will continue to pursue partnerships for the development and commercialization of its next-generation 100G optical products “as appropriate.”
De Jong succeeds acting CEO John Roland, also an Enablence board member. Roland will remain with the company, succeeding Peter Dey as chairman of the company’s board. Dey will remain as a member of the board.
De Jong is the founder and managing partner of De Jong & Co., a self-described boutique merchant bank that De Jong founded last year. Prior to founding De Jong & Co., De Jong was managing director of a hedge fund focused on small- and medium-size capitalized Canadian companies.
Also, Enablence reported that the Chinese subsidiary in which it owns a 49 percent interest, Sunblence Technologies, has achieved commercial production for 1 x 8 optical splitters. (SunSea Telecommunications holds a 51 percent interest.)
Progress on yields is such that Sunblence expects to begin commercial production of 1 x 4 and 1 x 16 optical splitters before the end of this month, the company said.
Additional splitter products will be commercialized in the first half of calendar 2013. The decision has been taken to transfer V-MUX production, currently carried on in Enablence's Fremont facility, to Sunblence. This transfer is expected to occur in the second half of calendar 2013.
Sunblence is well capitalized and expects to produce positive cash flow in calendar 2013, Enablence reported. As the only wafer fab deploying planar lightwave circuit (PLC)-based manufacturing for optical wafers and chips in China, Sunblence is very well positioned to capitalize on demand created by the rollout of broadband services that has been mandated by the Chinese government, Enablence said.
On the financial front, Enablence said that holders of certain unsecured convertible notes held by former shareholders of Pannaway, with a principal amount of $3 million, have agreed in principle to the cancellation of their notes and the conversion of their debt into shares of Enablence. Those involved are working to prepare a definitive written agreement, the company said. The result will be approximately $3.5 million of principal and accrued interest being converted to shares.
Enablence also announced a private placement equity financing by certain major shareholders, for up to approximately $2.5 million. Upon closing of the current tranche of equity financing, Enablence will have raised, over the last several months, a total of about $8 million through the issuance of equity and asset sales, the company said.
Upon conversion of the unsecured convertible notes, debt will have been reduced by well over $6 million.