Inventronics stays afloat with interim financing

Inventronics has reached an agreement with its banker in respect to certain defaults under its current credit arrangements.

Inventronics has reached an agreement with its banker in respect to certain defaults under its current credit arrangements.

Inventronics has agreed to sell surplus equipment at its manufacturing facility in Sherwood Park, Alberta, with the proceeds to be used to satisfy the term loan principle payment of $210,000, which was due on 30th September 2002.

The balance of the proceeds will be applied to further reduce the amount owing under its demand term loan facility.

The equipment will be sold in November for proceeds of more than $1,000,000.

The agreement provides a period of forbearance to allow for the closing of the previously announced $3.5-million mezzanine debt arrangement entered into by Inventronics with Mercantile Bancorp.

It also contains a proposal for the corporation's banker to provide long-term and operating lending facilities, which would fulfil one of the major conditions of the mezzanine debt financing.

"Earlier this year, we established a plan to resolve our involvement with our British subsidiary, to consolidate our Canadian manufacturing operations, and to refinance our balance sheet", said Dan Stearne, President and CEO.

"Since then, we have sold Eurocraft Enclosures in Dudley, England, and initiated a consolidation of our remaining manufacturing operations in Brandon, Manitoba, that will be concluded on time at the end of October.

The consolidation is expected to save Inventronics at least $2 million of operating costs each year".

"The refinancing of our balance sheet is being addressed through the financing arrangements we are currently negotiating.

When these projects are behind us, we will have aligned our costs with current revenues such that we will soon return to profitability and be able to focus all our efforts on profit and sales growth".

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