REUTER ANNOUNCES DEFAULT ON LONG-TERM DEBT
REUTER ANNOUNCES DEFAULT ON LONG-TERM DEBT HOPKINS, Minn., June 17 /PRNewswire/ -- Reuter, Inc.
(NASDAQ-NMS:REUT), announced that it has defaulted on its monthly debt payment to Sanwa Business Credit by making an interest-only payment and that it anticipates defaulting on its scheduled quarterly interest payment to U.S. West Financial Services which is due June 30, 1992.
The Sanwa debt underlies the company's Eden Prairie, Minn., waste processing and recycling facility and monthly debt service payments amount to approximately $250,000. This debt is guaranteed by Reuter, Inc. "We believe that with improving performance at our Eden Prairie plant, we will be able to repay the debt to Sanwa in full," said Joseph E. Blankenship, president and chief executive officer. "However, given the current level of cash flow from this facility's operations, it is necessary to reduce the monthly payment on this debt so that the cash flow is adequate to meet certain maintenance and operational needs of this facility. We have been in conversations with Sanwa about a short- term accommodation." The U.S. West debt underlies the company's recycling and composting facility in Florida. The quarterly interest payment on this debt is approximately $900,000. The construction loan is scheduled to convert to term debt by September 1992, assuming conditions precedent to conversion are met. The company currently does not meet the conditions precedent to conversion. The debt is non-recourse to Reuter, Inc. However, the company has various obligations under the loan agreement including the requirement to make an equity contribution of approximately $2.4 million prior to the conversion date. Blankenship said, "Our Florida operations are continuing to have start-up losses and certain capital expenditures are needed to correct construction deficiencies. As a result of these conditions, funds will not be available to make interest payments. We do not believe the cash flow from this facility will be adequate to support the current level of debt at this facility. We have started discussions with U.S. West on the potential alternatives in the restructuring of this debt. "Given the continuing losses in Florida and the drop in shipments from our manufacturing operations, we currently estimate that consolidated second quarter losses will range between $1 million to $1.5 million," Blankenship added. Headquartered in Hopkins, the company owns and operates a waste processing and recycling facility in Eden Prairie, Minn., and a recycling and composting facility in Pembroke Pines, Fla. The company also manufactures computer disk drive spindles, other machined items and plastic refuse containers, and owns and operates a refuse collection system in Louisiana. The common stock of Reuter, Inc., is traded in the NASDAQ National Market System with the symbol REUT. -0- 6/17/92 /CONTACT: Curt Swenson of Swenson Falker Eilertsen, 612-371-0000, for Reuter, or Joseph Blankenship or Anwar Bhimani 612-935-6921, both of Reuter/ (REUT) CO: Reuter, Inc. ST: Minnesota IN: SU:
AL -- MN009 -- 1131 06/17/92 14:00 EDT
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|Date:||Jun 17, 1992|
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