PNC Agents SMTC Amendment
SMTC announced the signing of the sixth amendment to its revolving credit and security agreement. PNC Bank is serving as lender and agent, and PNC Bank Canada Branch is serving as Canadian lender.
On April 7, 2014, SMTC and certain of its subsidiaries entered into the sixth amendment to its loan agreement dated as of September 14, 2011, as subsequently amended, among SMTC, SMTC Manufacturing Corporation of California, SMTC Mex Holdings, ZF Array Technology and HTM Holdings, as U.S. borrowers, and SMTC Manufacturing Corporation of Canada, as Canadian borrower.
The amendment extends the term of the loan agreement to January 2, 2015, and waives events of default under the loan agreement resulting from the previously announced inventory overstatement at SMTC’s Chihuahua, Mexico, facility and SMTC’s failure to maintain EBITDA of not less than $3,409,000 for the six months ended December 29, 2013. The amendment also increases the interest rate by 100 basis points for each of the various types of loans made under the revolving credit facility, decreases the maximum limit of the revolving credit facility to $40 million and amends several negative and financial covenants, including covenants such as the fixed charge coverage ratio and minimum EBITDA.
“We greatly appreciate the support of PNC and now believe SMTC is well positioned for the future,” stated Sushil Dhiman, president and CEO.
SMTC is a mid-size provider of end-to-end electronics manufacturing services (EMS) including PCBA production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services.