Tintri expecting to go bust next week

Troubled storage vendor claims it's 'likely' that it won't be trading past the end of June, but is exploring a sale

Tintri is exploring the possibility of a takeover with its dire financial situation "likely" to put it out of business next week.

The storage vendor has suffered through difficult times since listing on the NASDAQ market last year, and announced a wave of job cuts last September.

The situation has not improved and Tintri has now confirmed that it is in breach of covenants relating to its credit facilities with lenders.

Tintri said it is not in a position to repay the money it owes if its lenders declare an event of default.

In a statement to shareholders Tintri said: "Based on the company's current cash projections, and regardless of whether its lenders were to choose to accelerate the repayment of the company's indebtedness under its credit facilities, the company likely does not have sufficient liquidity to continue its operations beyond 30 June 2018.

"The company continues to evaluate its strategic options, including a sale of the company.

"Even if the company is able to secure a strategic transaction, there is a significant possibility that the company may file for bankruptcy protection, which could result in a complete loss of shareholders' investment."

Tintri is currently $15.4m in debt with Silicon Valley Bank and owes $50m to TriplePoint Capital. No further borrowing is available through these facilities.

The vendor's revenue in Q1 was $22m, alongside a loss of $1.14 per share.

Tintri could not publish the usual depth of information seen in quarterly results because a number of people involved in preparing the report have left the organisation, it said.

The vendor's share price has been at under $1 since 22 May. If a company's share price has been under this value for 30 consecutive days the shares can be de-listed from the NASDAQ market.

Andy Wright, commercial director at Tintri partner XMA, said younger storage vendors are struggling to compete financially now that the legacy players have snapped up next-generation start-ups.

"The storage market has been tough for some time and let's remember that even the biggest storage business in the world, EMC, decided it could no longer be a standalone business," he said.

"The number of start-ups that we have seen over the past few years with the move to flash and software defined has left the customer with more choice, and has driven the likes of HPE, NetApp and Dell to buy some of those start-ups.

"I think it has left a number of businesses in a position where there is no longer a prospect of them being snapped up by the big guys. Scaling by themselves is tremendously difficult, especially as most of them have been cash negative for many months or years."