SyQuest Technology Inc. Announces
17:52:42, 28 October 1998
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Waiver of Covenants With Loan Agreement and Reduction of Credit Lines
FREMONT, Calif.--(BUSINESS WIRE)--Oct. 28, 1998--SyQuest Technology Inc. (Nasdaq:SYQT) Wednesday announced that as of Sept. 30, 1998, the company was not in compliance with its lending covenants governing its line of credit with Greyrock Business Credit (GBC), the company's asset-based lender.
GBC has agreed to waive the default. As part of the waiver agreement, GBC has reduced the company's credit line from $30 million to $10.75 million.
Currently, the company has no availability under its reduced credit line for additional borrowing and has no other sources of significant debt financing. However, the company is seeking additional funding from alternate sources. To date, it has not been successful.
These actions, as well as current market pressures, have created significant liquidity problems for the company.
The company previously announced that it has been in negotiations with certain of its investors to reach agreement on a series of transactions that would make an additional $13 million available to the company. The transaction has not closed, and it is unlikely to close unless SyQuest is able to substantially increase its line of credit.
Even if the company were able to increase its line of credit, there are not any assurances that the additional $13 million would be available.
As announced Tuesday, the company continues its relationship with CIBC Oppenheimer as its investment banker to assist in attempting to restructure its capital accounts, raise additional financing and advise the company with respect to acquisitions or strategic alliances. While there are no assurances that it will be successful, the company continues to seek a solution for its current financial crisis.
For further details on these and related matters, consult the company's Form 8K filed on Oct. 27, 1998, and previous Securities and Exchange Commission filings.
This news release contains forward-looking statements that involve risks and uncertainties, including competition in the marketplace for the company's products, and other risks detailed from time to time in the SEC reports filed by SyQuest, including its most recent reports on Forms 8K, 10K and 10Q.
Note to Editors: SyQuest is a registered trademark and the SyQuest logo is a trademark of SyQuest Technology Inc. All other brands or trade names are the property of their respective companies.
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CONTACT: SyQuest Technology Inc., Fremont Henry Lo, 510/226-4000
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