Powerwave foreign plants face layoffs
Powerwave Technologies Inc . may have to lay off hundreds of employees at its factories in Thailand, India and in Europe after a lender wouldn’t allow the struggling wireless-equipment maker to spend money on its overseas manufacturing plants.
Distressed-debt investor Gores Group, which extended a $35 million loan through an affiliate as Powerwave floundered last fall, hasn’t consented to letting Powerwave officials spend company money on foreign affiliates according to a person who spoke to Dow Jones & Company Inc. The move could cause layoffs as early as next week, the person said, and more broadly could hurt the value of Powerwave’s business as executives try to find buyers to bid on the company at an April 8 auction.
Powerwave attorneys didn’t respond to requests for comment or to say how many workers the company employs abroad. The company said it had more than 2,100 workers globally as of early 2012, in filings made with the U.S. Securities and Exchange Commission.
The Santa Ana, Calif., company filed for bankruptcy on Feb. 28 after the Gores Group affiliate took more than $8 million from its bank accounts, according to court papers.
Powerwave and its affiliates have made and sold products like antennas, radio-frequency-power amplifiers, remote radio head transceivers and tower-mounted amplifiers.
Declining demand for its wireless equipment from customers like Nokia Siemens Networks , Alcatel-Lucent and Samsung Electronics Co . caused Powerwave to lower its prices in recent years, the company said in earlier regulatory filings.
In recent years, the company tried to save money by closing its manufacturing facility in Salisbury, Md., moving that work to Asia, and relocating its headquarters to California. With an unsteady pipeline of revenue, the company still struggled to pay back bondholders owed $256 million.