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SMTC Corporation has amended its credit agreements as part of its ongoing activities to improve its capital structure.
On August 8th SMTC amended its credit agreements and reduced its Term A loan outstanding balance from $50 million to $40 million. The amended credit agreements improve our financial covenants, lowers our cash-interest costs and expands borrowing capacity under our asset-based revolving credit facility to $65 million from $45 million.
The revised credit agreements are part of the company’s ongoing strategy to align its capital structure to position for growth. In late June, SMTC completed a Rights Offering and Registered Direct Offering that generated aggregate proceeds of approximately $14.6 million. On July 3rd, SMTC used $12 million of those proceeds to accelerate pay-off of its more expensive and restrictive outstanding Term B debt.
“We executed on our debt-reshaping strategy and remain committed to further strengthening our balance sheet through working capital programs to support the needs of our customers and supply-chain partners and profitably grow our business,” SMTC Corporation’s President and CEO Ed Smith said.
SMTC Corporation was founded in 1985 and acquired MC Assembly Holdings, Inc. in November 2018. Following this acquisition, SMTC has more than 50 manufacturing and assembly lines in United States, China and Mexico which creates a powerful low-to-medium volume, high-mix, end-to-end global electronics manufacturing services (EMS) provider. With local support and expanded manufacturing capabilities globally, including fully integrated contract manufacturing services with a focus on global original equipment manufacturers and emerging technology companies, including those in the Defense and Aerospace, Industrial, Power and Clean Technology, Medical and Safety, Retail and Payment Systems, Semiconductors and Telecom, Networking and Communications; and Test and Measurement industries. As a mid-size provider of end-to-end EMS, SMTC provides printed circuit boards assemblies production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services. SMTC services extend over the entire electronic product life cycle from the development and introduction of new products through to the growth, maturity and end-of-life phases.