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Keane receives two default notices on 2% convertible debentures, in danger of loan default
By Caroline Salls
Pittsburgh, April 9 - Keane, Inc. received two default notices on its 2% convertible subordinated debentures due 2013 for failure to file its 10-K for the year ended Dec. 31 with the Securities and Exchange Commission and the indenture trustee, according to an 8-K filed with the SEC.
The company has 60 days from receipt of the second default notice to cure the alleged default.
As of March 31, there was $150.9 million in total principal and interest outstanding on the notes.
If the notes are accelerated, Keane said it would also be obligated to pay up to $17.9 million in taxes.
An event of default under the notes indenture would also trigger an event of default under the company's credit agreement, which would allow for acceleration of the loans and termination of the commitments, requiring Keane to cash collateralize the letters of credit.
As of Dec. 31, Keane had $36.2 million in outstanding letters of credit under the credit agreement.
In addition, the New York Stock Exchange, Inc. said as a result of Keane's failure to timely file its 10-K, it is subject to the procedures specified in the SEC Annual Report Timely Filing Criteria of the NYSE's Listed Company Manual.
As a result, the NYSE will monitor Keane and the status of Keane's 10-K filing, and, if Keane has not filed its 10-K within six months of the filing due date, the NYSE may either allow Keane's securities to be traded for up to an additional six-month trading period or begin suspension and delisting procedures.
Keane is a Boston-based business and information technology services firm.
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