With only $200,000 cash left in the bank, former WiMAX booster Alvarion has entered receivership and all of its employees were issued layoff notices.
Israeli newspaper Globes said that despite the notifications, many Alvarion employees continued showing up for work as usual while the company seeks investors. Some workers could be rehired if money is made available.
Alvarion, based in Rosh Hayain, Israel, announced on July 15 that the District Court of Tel-Aviv--Yaffo had appointed Yoav Kfir as the company's receiver. Alvarion said it would work with Kfir to assist him in executing a plan for the company. Silicon Valley Bank, a secured creditor of Alvarion's, petitioned to put Alvarion into receivership, telling the court that Alvarion had racked up $3 million in debt that it could not repay.
Alvarion has asked the court to order Silicon Valley Bank to transfer $1 million to the receiver's account immediately. The $200,000 sitting in Alvarion's accounts was enough to pay only 17 of Alvarion's 160 employees before the receivership order was issued.
"The employment of only 17 employees is liable to cause the company's customers to cancel contracts they have signed with the company and/or cause problems in collecting money from the company's customers," stated the motion filed by Alvarion.
Alvarion's expenses have been estimated at $2 million a month. If Silicon Valley Bank does not transfer the money, some 140 Alvarion employees are expected to lose their jobs.
Meanwhile, Haaretz reported that Kfir said several investors have indicated interest in Alvarion.
Alvarion was a longtime champion for WiMAX technology but struggled as mobile operators began adopting LTE rather than WiMAX for broadband services. The company diversified into other businesses such as distributed antenna systems (DAS) and Wi-Fi, the latter stemming from its November 2011 purchase of Wi-Fi equipment vendor Wavion.
In mid 2012, Alvarion announced it would focus its business on vertical and carrier Wi-Fi markets, but the company continued to struggle and during April its president and CEO, Hezi Lapid, resigned.
In May 2013, Alvarion sold its WiMAX unit, referred to as the carrier licensed division, to Telrad Networks. Under terms of the final agreement, Alvarion was to receive $4 million, paid in installments over four quarters, with the first payment of $1.3 million payable at closing. In addition, Alvarion may receive certain performance-based milestone payments of up to $7.7 million.
When terms of the deal were first announced in February 2013, Alvarion was originally supposed to be paid $6 million plus up to $6.1 million in performance-based milestone payments. However, Alvarion and Telrad change the terms and waived certain closing conditions "in order to ensure and expedite the closing of the transaction," said Alvarion.
For more:
- see this Alvarion release
- see this Globes article
- see this Haaretz article (sub. req.)
- see this Cellular News article
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