History (1994): ATG Cygnet to Be Controlled by Crédit Lyonnais

The head of ATG Cygnet (Toulouse, France) manufacturer of 12-inch WORM disks and jukeboxes, is in turmoil.

Since Crédit Lyonnais (Paris, France) became the majority shareholder, via its subsidiary Innolion, in mid-August, the company has been in an uproar.

Consequently, both the COB Manuel Munz and CEO Christian Maillard left the company.

ATG Cygnet is now under the direction of Bernard Meffre, 48, previously with Site, a technical documentation firm.

Right in the middle of summer vacation, Altus Finance, Crédit Lyonnais’ other subsidiary and 49% shareholder of ATG, decided to trade its bonds in for stocks, thereby becoming the main shareholder of the enterprise, with 68% of the capital.

The other stockholders have not changed, namely IRDI, a regional developmental organization and two private holders (Bruno Costa-Marini, Munz, Maillard, etc.).

Following this, Crédit Lyonnais transferred all of its holdings in Altus to its other subsidiary lnnolion.

“The objective is to increase capital in the company from FF21 to FF37 million and to reduce its debt to 25 million francs,” according to Altus.

The recently converted bonds were underwritten by Altus last year at the time of ATG’s acquisition of Cygnet.

One big question remains: did the French bank make this deal with intentions for long-term development of ATG Gigadisc, or did it take company in hand hoping to boost its profitability in a short time before selling it?

An important factor is the current financial instability of Crédit Lyonnais. The French government has had to bailout the bank that also plans to liquidate a certain portion of its shares. Bernard Meffre affirmed that Innolion has an industrial as well as a financial interest in the enterprise, and a plan for its future. Recently, he decided to focus ATG Gigadisc exclusively on 12-inch WORM disks and drives. Longer term projects concerning 3.5-inch rewritable disks seem to have been pushed aside. The former managers were discussing with a Chinese company, FEG, manufacturing projects for 3.5-inch disks based on a new ATG-owned technology.

“This affair is not a top priority,” said Bernard Meffre.

As a result, the majority of ATG’s efforts will be concentrated on 12-inch drives and media.

Negotiations with Thompson are in the works to utilize a new 690nm laser that will significantly enhance the disk capacity to be able to reach 14GB, then 20 to 30GB per platter, compared to the present 10.2GB.

Since 1979-80, when Thompson first launched laser video disks in France, ATG has had a rather stormy existence. And while the final chapter of the saga is far from over, still others remain that have yet to be written. For example, it’s difficult to explain why suddenly, Manuel Munz, who is responsible for bringing Altus Finance into ATG, is no longer in the good graces of Crédit Lyonnais. Some people think the French bank didn’t appreciate that he and his friend Costa-Marini sold their personal NIC shares to US investors without any prior warning.

ATG Cygnet consists of 136 people in Toulouse and 74 others in San Jose, CA at their Cygnet Systems locale.

Integrating 5 months of Cygnet’s activity, the fiscal year ended last March 30 with FF200 million in sales, 80% in exports. According to Pierre Gabriel Vallée, director of Innolion, total profit was around FF7 million, with FF1 million for France alone.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 81, published on October 1994.