RealTime IT News

Peregrine Looks For a Lifeline

Hoping to gain a new lease on life, Peregrine Systems announced it received a $50 million loan and reached an agreement to sell its supply-chain management business.

The embattled San Diego management software maker said it signed a loan and security agreement with Foothill Capital Group, an administrative arm of Ableco Finance. Under the terms of the deal, Peregrine said it would begin repaying the principal in $1.5 million monthly payments beginning February 2003. The balance is payable at the end of 2003.

In another move to free up much needed cash, Peregrine said it sold off its supply-chain business to Golden Gate Capital, a private equity firm. Its supply chain management business includes assets from Harbinger Corp. and Extricity Financial details of the transaction, which is slated to close this month, were not disclosed.

An accounting storm swept up Peregrine in May, when CEO Steve Gardner and CFO Matt Glass resigned after the company said its auditors might have found as much as $100 million in overstated revenue during 2001 and 2002. The company fired Arthur Andersen as its auditor in April, only to late dismiss its replacement, KPMG, citing a potential conflict of interest with some of its earlier dealings with KPMG's consulting arm.

The company later disclosed that the Securities and Exchange Commission has opened an investigation into its accounting practices.

Peregrine's shares have plunged over 90 percent this year, leaving them trading at $1.20 at yesterday's close.