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Kemet amends 6.66% notes to extend reduced consolidated minimum net worth
By Susanna Moon
Chicago, Aug. 25 - Kemet Corp. said it entered into a second amendment with holders of its 6.66% senior notes to extend the reduced consolidated minimum net worth required for compliance through Sept. 30.
The company said that as a result of an impairment charge reported in its financial results for the quarter ended June 30, it would not have been in compliance with the consolidated minimum net worth covenant of its senior notes, which have an outstanding principal amount of $40 million.
Kemet entered into an amendment with the holders of the notes on July 30, which lowered the required minimum consolidated net worth through Aug. 31.
The company said it is in discussions with third parties to obtain funds to try to replace the notes by Sept. 30.
If the company is unsuccessful in obtaining funding or is unable to restructure, replace or obtain an additional waiver of the consolidated minimum net worth covenant beyond Sept. 30, holders could declare the notes due and payable.
This would also cause the company to be in default under its existing agreements with UniCredit, for its €96.8 million of outstanding debt.
A failure by the company to either repay the notes or the UniCredit facility, or the absence of a rescission of such repayment requirement by the holders of the notes and UniCredit, within 30 days, would allow the holders of the convertibles to declare those notes due and payable and require repayment.
The company currently has $175 million of outstanding convertibles.
Kemet said it does not currently have the ability to repay the notes, the UniCredit facilities or its convertibles if any of the debt became payable prior to maturity.
Kemet is based in Simpsonville, S.C., and manufactures tantalum, multilayer ceramic and solid aluminum capacitors.
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