UniTek, term lenders agree to negotiate credit agreement amendment

By Caroline Salls

Pittsburgh, July 18 - UniTek Global Services, Inc. entered a further amendment to the forbearance agreement with its term credit agreement lenders and agreed with them to negotiate definitive loan documentation and enter into amendments to the credit agreement to waive existing defaults and revise loan covenants, according to a news release.

The company said the standstill period contained in the original April 30 forbearance agreement has been further extended, through July 26.

UniTek and the term lenders have agreed to prepare and execute an amendment to the credit agreement before that date.

Amendment terms

The amendment will include a waiver by the term lenders of all existing defaults and will also include revised financial covenants.

The amended term loan will continue to mature in 2018 and will bear monthly interest payable in cash at a rate equal either to Libor plus 950 basis points with a 1.5% floor or Prime rate plus 850 bps, plus, in either case, an amount to be added to the principal balance of the term loan at an annual rate equal to 4% of the outstanding balance.

The lenders will receive warrants for shares of the company's common stock equal to 19.9% of the shares outstanding before the date of the amendment, exercisable at $0.01 per share.

The lenders will also receive a waiver and amendment fee, to be added to the principal balance of the term loan, equal to 2% of the outstanding loan balance, of which 0.5% has accrued upon the signing of the forbearance amendment.

The term loan is prepayable by the company at any time without penalty.

"This agreement represents another important step in our efforts to return the focus of the entire organization to executing our growth strategy," chief executive officer Rocky Romanella said in the release.

"We have made significant progress on our financing issues and will continue to work toward the completion of our audit and the remaining key initiatives."

UniTek is a Blue Bell, Pa.-based provider of engineering, construction management and installation fulfillment services to the telecommunications, broadband cable and satellite industries.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.