Despite the close association between MGX Solutions and Peregrine Systems over the past four years, MGX says recent developments at the struggling US software company will not leave it significantly exposed.
MGX Solutions CEO Dan McMahon says Peregrine`s decline is regrettable but it is not expected to have a material impact on his company, the hardware and software delivery arm of JSE-listed MGX Holdings.
"We have been closely associated with Peregrine over the last four years as the distributor for the company`s products and, as such, it`s reasonable to expect that Peregrine`s collapse would affect us materially. However, this is not the case, and we are covered on most fronts."
This week Peregrine announced that it had filed for Chapter 11 bankruptcy protection, had sold its Remedy business unit to systems management giant BMC and that it was suing Andersen for incorrectly audited financial reports. The company`s 2001 figures had a $250 million discrepancy.
Peregrine invested earlier this year in parent company MGX Holdings, providing a cash injection of about R140 million.
"Since we are the master distributor for BMC in SA, we should have ongoing access to both Peregrine and Remedy products, and as such we can provide ongoing sales and support to existing and prospective customers," says McMahon. "We are in negotiations with all parties to prevent disruption of product supply and support."
BMC, the second-largest systems management company in the world, has acquired Remedy for $350 million, which will assist Peregrine in settling its financial affairs.
"It`s important to note that Peregrine is not bankrupt, but is using Chapter 11 as a legal process to deal with is debt restructure," says Allen Lewis, Peregrine product manager at MGX Solutions.
"Operations are ongoing as per normal at Peregrine - staff will be paid, product development will continue and Peregrine will execute its two-year roadmap as announced earlier this year.
"Many companies have emerged from Chapter 11 the stronger for the experience, including Texaco, 7-Eleven and Toys-R-Us, to name a few. Peregrine is confident it will join this list of Chapter 11 survivors," he says.
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