Aavid defaults on credit facility, may not have funds to make next note payment

New York, Nov. 14 - Aavid Thermal Technologies Inc. said it is in default on its credit facility and warned that it may not have enough cash to make the interest payment due in the first quarter of 2002 on its 12¾% senior subordinated notes.

Aavid said in a filing with the Securities and Exchange Commission that the default on its credit facility is a result of it being out of compliance with some of the financial covenants.

It notified its lenders which have not waived the default, Aavid added. It said the lenders could demand payment immediately of amounts borrowed. Aavid currently has $17 million outstanding on the revolving portion of the facility and $41 million on the term loan.

Aavid said it is currently negotiating with its lenders.

Cash is sufficient to meet obligations for the rest of the year, Aavid said.

But it warned it "may require additional funds" to meet the scheduled interest payment on its notes due in the first quarter of next year.

"The Company is exploring various alternatives to provide the liquidity to make the payment," Aavid said.

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