Optical component maker agrees bridging loan; will sell Swiss photodiode business.
Enablence Technologies Inc. announced today that it has obtained a US$3 million bridge loan from a California bank to fund on-going operations, which will be guaranteed by a third party secured against the Company. The Company also announced its intention to sell its wholly-owned photodiode business located in Switzerland ("ENA Switzerland"). The bridge loan will provide cash to operate the business while the Company finalizes the renegotiation of certain secured notes payable totalling approximately US$11 million (the "Notes"). The Company is in active negotiations with the Note holders, and expects to finalize the revised payment terms in July.
While the Notes were due on June 23, 2012, the Note holders have agreed to a standstill agreement which provides that the Note holders will not initiate actions to collect on the Notes during the renegotiation period.
The Company intends to obtain additional financing, either from strategic or financial investors, to support the Company's expected growth of PIC (Photonic Integrated Circuits) products, including the production of the Company's multi-channel 100G optical components, including transmitter/receiver optical sub-assembly ("TOSA/ROSA") and 100G polarization multiplexed quadrature phase shift keying ("PM-QPSK") products. The proceeds from the sale of ENA Switzerland will be used to partially repay the bridge loan and the Note holders and fund continuing operations.
"This bridge loan and the planned sale of ENA Switzerland is a significant step towards putting Enablence on a sound financial footing so that the Company can secure its long term future and continue to provide its customers with reliable and uninterrupted products and services going forward" said Peter Dey, Chairman of Enablence.
"Thanks to the continued support of our tier-1 customers and key suppliers, we have been able to operate normally through the month of June. We expect to report an increase of over 30% in revenues for the June quarter as compared to the March quarter. Furthermore, our joint-venture company, Sunblence Technologies, has begun shipping its first commercial splitter products and is aggressively ramping up capacity to meet anticipated growth in local access markets. We will provide more details when we report our year end results later this summer."
Enablence Technologies Inc.
Chief Financial Officer
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