Encore Computer Corp has said its real time operating systems will form the basis of a new, refreshed company when the proposed sale of its high-end storage business to Sun Microsystems Inc goes ahead. Sun offered Encore $185m last week for its storage management business (CI No 3,170) in a bid to build on its own fledgling storage interests. The companies are currently in negotiation to establish exactly what Sun will take in the agreement. Encore has said it is unclear as to what products will remain at this stage, but confirmed it will be hanging on to its real time products which include its Infinity family with the Reflective Memory processor linkage, licensed by Digital Equipment Corp some time ago (CI No 2,407). The money raised in the sale will be paid to Gould Inc, Encore’s financial partner which has been funding the Fort Lauderdale, Florida company. Gould has pledged it will cancel all debts owed to it, and Encore says it should end up with around $30m in the bank. Encore was kicked off the Nasdaq market in April (CI No 3,150) after it failed to meet Nasdaq’s equity requirements, and last month it reported first quarter net losses of $20m onrevenues that dropped 29% to $8.3m (CI No 3,166). Encore spokesperson Ronda Indictor said Sun and Encore have 60 days to finalize the arrangement. Originally Sun approached Encore with a view to offering it an OEM customer deal, but Sun rethought its plan and said it would like to buy the storage section of the company. Indictor said the deal will put Encore in a strong position to carry on trading, giving it the capital to ‘start afresh’, enabling it to concentrate on developing both existing and new products. When Encore is back on its feet it will try to regain its Nasdaq listing.
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