Richardson amends to waive defaults, change covenants, allow for convertibles purchase

By Sara Rosenberg

New York, Aug. 10 - Richardson Electronics Ltd. amended its credit facility, waiving defaults, adjusting covenants and allowing for the purchase of convertibles, according to an 8-K filed with the Securities and Exchange Commission Thursday.

The defaults were a result of the company's non-compliance at March 4 with the leverage ratio, fixed-charge coverage ratio and tangible net worth covenants.

The amendment adjusted the minimum required fixed-charge coverage ratio for the first quarter of fiscal 2007 and adjusted the minimum tangible net worth requirement.

In addition, the amendment permits the purchase of $14 million of the company's 8% convertible senior subordinated notes due 2011.

Furthermore, under the amendment, the company's Sweden facility was eliminated and its Canada facility was reduced by about $5.4 million.

Lastly, the amendment provides that the company maintain excess availability on the borrowing base of not less than $20 million until it files a 10-Q for the quarter ended March 4, at which time excess availability of the borrowing base must be no less than $10 million.

The amendment was completed on Aug. 4.

Richardson is a LaFox, Ill.-based provider of engineered products, serving the RF, wireless and power conversion, electron device, security and display systems markets.

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