ExelTech announced that on May 19, 2009 it has successfully renewed its $7 million credit facility with a Canadian chartered bank. This new credit facility replaces the previous facility with the same bank and bears new covenants which ExelTech expects to be in compliance with.
The Corporation currently has outstanding approximately $2.3 million in principal amount of convertible debentures due May 29, 2009 (the “Debentures”). The maturity date of the Debentures was previously extended from February 26, 2009 to the current maturity date. One of the conditions of the renewed credit facility is that the Corporation must refinance the Debentures with third party debt or equity. ExelTech is currently in discussion with certain parties to provide financing in order to retire the Debentures and for general working capital needs. No definitive agreements with potential investors have been reached yet and there can be no assurance that such agreements will be reached.
Accordingly, ExelTech has entered into discussions with holders of the Debentures to extend the maturity date of the Debentures for a period of six months, to November 30, 2009. Any proposed extension or amendment to the terms of the Debentures is subject to the consent of the debenture holders in accordance with the trust indenture creating the Debentures, the receipt of board of directors approval and the approval of TSX Venture Exchange.