Inventronics successfully concludes refinancing

Inventronics has entered into agreements, including the previously announced mezzanine debt financing, to refinance its balance sheet.

Inventronics has entered into agreements, including the previously announced mezzanine debt financing, to refinance its balance sheet.

The refinancing is the final step in a comprehensive restructuring program that Inventronics implemented to return the 32-year-old company to profitability, and continue its diversification drive into new markets.

"This refinancing and our other restructuring initiatives have combined to enable Inventronics to dramatically improve its working capital position and bring its operating costs in line with its existing revenues", said Dan Stearne, Inventronics' President and CEO.

"The last few months have been challenging for IVT, but we now have the pieces in place for a profitable, growth-oriented future".

Under the terms of the refinancing completion and funding are scheduled for 22nd November 2002.

Inventronics will receive $3.5 million from investment funds managed by Mercantile Bancorp for the issuance of five-year subordinated promissory notes, subject to finalisation of certain closing conditions.

Inventronics will issue 1,715,000 warrants that are exercisable over five years, with each warrant entitling the Mercantile funds to buy one Inventronics common share for $0.40.

Inventronics' banker has extended new operating and long-term debt arrangements which will provide a committed operating facility of $1 million and a structured long-term facility with an available limit of $2.5 million.

Inventronics has scheduled an auction of surplus equipment for 26th November 2002.

Proceeds of more than $1 million will be added to working capital.

After completion of this refinancing and sale of assets, Inventronics' balance sheet will reflect approximately $2.5 million of working capital, of which more than $1 million will be cash.

Its debt will consist of the $3.5 million of subordinated promissory notes and approximately $2.2 million in capital lease obligations.

This refinancing is one of three concurrent restructuring initiatives that Inventronics undertook this year.

The other two were the consolidation of North American manufacturing into IVT's wholly owned plant in Brandon, Manitoba (requiring the closure of a leased plant in Sherwood Park, Alberta); and the disposition of IVT's wholly owned UK subsidiary, Eurocraft Enclosures.

The UK disposition was completed in September and the manufacturing consolidation in October.

Consolidating all of its production into its ISO9001:2000-registered facility in Brandon will save Inventronics more than $2 million in annual operating costs.

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