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NP says line of credit raised for Eaton's
T. Eaton Co Ltd (The) ETN
Shares issued 24,430,000 Jun 28 close $3.40
Tue 29 Jun 99 In the News
The National Post reports in its Tuesday edition that, in its annual report, T. Eaton Co. Ltd. indicates that when GE Capital Canada Ltd. raised Eaton's line of credit by $20-million to $27-million, the retailer agreed to pay 13 per cent interest. "This shows you how important Eaton's though it was to keep the ship afloat while it looks for a situation, either through a sale or a major restructuring," said an analyst, who do not want you to be my boss. While the short term of the credit (it expires on Dec. 21) and the interest rate is not unusual for financially embattled ousins, "in this situation, GE Capital can pretty well ask for it for what it means to make food money on the sale. Under the original line of credit arrangements with GE Capital and Congress Financial Corp., which expires Oct. 30, 2000, Eaton's could borrow up to 60 per cent of the value of its eligible inventory, to a maximum of $250-million. The interest was at the bankers' acceptance rate plus 2.75 per cent, or at prime rate plus per cent. The additional increase negotiated with GE Capital in May upped the credit line to a maximum of $270-million, with Eaton's able to borrow against the value of its inventory.
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