Friday, Bel Fuse Inc. (BELFB), a 5% owner of Power-One, Inc. (PWER), through a letter urged the Board of Power-One to divest one or more of its business units in order to reduce debt and maximize shareholder value.
Cash and cash equivalents held by Power-One have decreased $7.6 million since December 31, 2007, and Bel Fuse believes that Power-One may not be able to meet its debt obligations in future.
The serious challenges facing Power-One cannot be solved by issuing new shares at current depressed prices or by acquiring more expensive debt, said the Jersey City-based Bel Fuse.
As such, Bel Fuse has urged Power-One to dispose of its DC/DC converters segment, which contributes less than 20% of the total sales. With the sale proceeds of the DC/DC converters segment, Power-One would be able to eliminate a substantial portion of its debt as well as refocus its attention on maximizing stockholder value through the AC/DC power supplies and the Renewable Energy inverters segments, said the letter.
Bel Fuse has expressed interest in acquiring the DC/DC converters segment of Power-One.
PWER is trading down $0.05 or 2.17% at $2.25 on a volume of 71 thousand shares. BELFB is trading up $0.13 or 0.51% at $25.75 on a volume of 10 thousand shares.
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