Refinancing leads to solvency

Edited by the Electronicstalk editorial team Dec 2, 2002

Inventronics has received $3.5 million of cash plus an additional $3.5 million of available credit lines, following the completion of a previously announced refinancing of its balance sheet.

Inventronics has received $3.5 million of cash plus an additional $3.5 million of available credit lines, following the completion of a previously announced refinancing of its balance sheet.

Inventronics received the $3.5 million of cash from investment funds managed by Mercantile Bancorp.

In return, Inventronics issued to the Mercantile funds five-year subordinated promissory notes, and 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 received the $3.5 million of credit - composed of a $1 million operating line and a $2.5 million long-term line - by way of new banking facilities with its long time banker.

"Our new cash and credit facilities, when combined with approximately $2 million received from the reduction of certain inventories and a 26th November auction of surplus manufacturing equipment, have significantly improved Inventronics' working capital and cash position, said Dan Stearne, Inventronics' President and CEO.

"They represent the culmination of a comprehensive restructuring program to return the corporation to profitability".

"With our highly efficient Brandon plant now producing all of Inventronics' products, and a new experienced financial partner that specialises in providing support to industrial companies such as Inventronics, we are well positioned to return to profitability and recommence our growth strategy", Stearne added.

Inventronics' balance sheet now includes more than $2 million of working capital, of which more than $1 million is cash.

The corporation's debt consists of the $3.5 million of subordinated promissory notes and approximately $2.2 million in capital lease obligations with access to $3.5 million of additional borrowing capability.