GSI Group disputes default notices from some holders of 11% notes

By Caroline Salls

Pittsburgh, Dec. 12 - GSI Group Inc. has received disputed notices of default from four holders of its 11% senior notes due 2013, according to an 8-K filed Friday with the Securities and Exchange Commission.

GSI said the noteholders claim the company failed to comply with covenants that require it to file its 10-Q for the quarter ended Sept. 26 within the time specified by SEC rules and regulations.

However, the company said it has informed the indenture trustee that it does not believe the letters constitute proper notice.

Even though it does not believe the letters from the noteholders constitute proper notice, GSI said it is working diligently to complete an audit committee review and file the 10-Q to avoid default.

GSI said its audit committee is conducting a review of sales transactions in its semiconductor systems segment and other sales transactions that contain arrangements with multiple deliverables for fiscal years 2007 and 2008.

In addition, GSI said it has already achieved annualized cost savings from the integration of Excel Technologies, Inc. and other streamlining initiatives of roughly double the previously announced target of $6 million to $8 million.

GSI supplies precision technology to the medical, electronics and industrial markets and semiconductor systems. The company is located in Billerica, Mass.

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