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Oclaro, Inc. Message Board

  • fnsrmsft fnsrmsft Aug 28, 2013 12:29 PM Flag

    Creditors not customers have interest in keeping Oclaro alive

    Customers will manage, but creditors would rather see their full return instead of pennies on the dollar.
    I guess we wait to see if anyone bites on those assets they have been trying to sell now for the past three months.

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    • To the contrary. The creditors will get full return and more if they drive Oclaro into default (and BK). In BK, the liquidation of Oclaro's assets will cover the debt easily. The creditors added covenant in the yesterday's 8-K is onerous and very risky for Oclaro .
      "(iii) adding a covenant that the Borrower is required to maintain liquidity of at least $45 million at all times (liquidity being the sum of the Borrower's excess availability under the revolving credit facility plus the lesser of $25 million and qualified cash balances). If any event of default were to occur, including a failure to comply with the covenant regarding asset sales described above, such an event of default would (unless waived by the Lenders) entitle the Lenders, upon notice to the Borrower and the Parent, to declare all amounts owing under the Credit Agreement, immediately due and payable. No changes were made to the interest rates or commitment fees payable under the revolving credit facility. The Borrower paid the lenders an amendment fee of $650,000."

 
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