MARKHAM – Telecom and cable equipment and services supplier Cygnal Technologies said late Monday it is “currently engaged in discussions with one of its principal lenders regarding the refinancing of its outstanding debt owed to that lender, the continued availability of advances under Cygnal’s existing credit facility with that lender and the willingness of the lender to extend the current maturity date of debt outstanding under that credit facility due in January 2008,” reads its press release.
The lender has told Cygnal that it is not prepared to extend the maturity date of its debt nor extend additional credit to Cygnal in the absence of certain concessions from Cygnal.
“Those concessions may include a reduction or curtailment of certain of Cygnal’s operations and a sale of some or all of Cygnal’s assets. Cygnal is engaged in discussions with other parties regarding strategic alternatives, including the refinancing of Cygnal’s existing secured debt, the sale of an equity interest in Cygnal and a sale of the entire company, and is reviewing other options,” continues the release.
Cygnal provides network communication solutions including the design, integration, installation, maintenance and management of wired and wireless solutions and networks and also has a sizable supply company in White Radio.
“There can be no assurance that Cygnal’s discussions with its existing lender or such third parties will be successful or that its debt will be refinanced,” continues the release.
“There can be no assurance that Cygnal will be able to generate sufficient cash flow to repay that indebtedness when due and Cygnal requires additional funds to satisfy its current working capital requirements. The total amount of Cygnal’s outstanding debt limits its ability to borrow additional funds.
“If Cygnal is not successful in refinancing its existing debt and raising additional funds for working capital, it will be required to reduce or suspend its operations. The failure of Cygnal to repay its outstanding indebtedness when due would constitute an event of default under the terms of Cygnal’s outstanding secured debt and could result in the loss of some or all of its assets to foreclosure or sale. In that event, there can be no assurance that Cygnal’s assets would be sufficient to repay in full that indebtedness.
The company also announced that its chief financial officer, Brian Pedlar, had resigned effective today.
