Storage king EMC has agreed to provide a $100 million loan to help fellow vendor Quantum refinance its debt. Quantum and EMC announced the financing commitment Friday.
For EMC, the loan represents an opportunity to help one of its technology partners. EMC OEM's data deduplication software from Quantum is a deal dating back to May of 2008.
EMC's biggest storage reseller partner, Dell, in November also signed a dedupe technology deal with Quantum.
"The partnership with Quantum accelerated EMC's rapid rise to become the world's largest provider of data deduplication solutions," said Rich Napolitano, senior vice president at EMC, in a statement. "We're fortunate to have the financial strength to execute this strategic investment. By addressing the challenge posed by its capital structure, Quantum will be able to focus more energy on continued innovation and working with EMC to remain front and center in one of the storage industry's hottest trends."
"The financing from EMC will give us greater financial flexibility and enable us to maintain a high level of investment in deduplication and replication technology that can be leveraged by both Quantum and our OEM partners, with compatibility across solutions," said Rick Belluzzo, chairman and CEO at Quantum, in a statement.
A Quantum spokesperson said that the term loan, which carries an interest rate of 12 percent and which matures in 2014, will be used by Quantum to refinance $135 million in debt, which is due next February.
Quantum is offering holders of its convertible debt an offer of 70 cents on the dollar to sell that debt back to Quantum, the spokesperson said.
The spokesperson also said that the 12 percent loan from EMC is one that Quantum feels good about given the tough economy.
Quantum has been struggling as of late. The company said earlier this month that it faced delisting by the New York Stock Exchange, and that because of a change in the NYSE policy regarding the need to maintain a share price of $1 or greater, it now has until mid-August to comply.
Quantum in January said its third fiscal quarter revenue of $204 million represented an 11 percent fall compared with the same period one year ago, and that it lost $340 million during the quarter.
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