Wobbly Enablence secures bridge loan
Having missed debt payments, Enablence Technologies has secured a $3 million bridge loan to fund ongoing operations and is looking into several other options for raising more money, including selling its photodiode subsidiary.
Enablence missed payments on approximately $11 million in debt that came due at the end of June. The company is negotiating with the note holders to revise its payment schedule and said it expects to come to an agreement sometime this month. The note holders have agreed to a standstill agreement, meaning they will not initiate actions to collect on the notes during the negotiation period.
Meanwhile, Enablence plans to shop its wholly owned photodiode business, ENA Switzerland. The proceeds will be used to partially repay the bridge loan and the note holders and to fund continuing operations.
The company said it also intends to obtain additional financing, either from strategic or financial investors.
Enablence expects it will ultimately be aided by growth in sales of its PIC (photonic integrated circuits) products, including the production of the company's multichannel 100G optical components, including transmitter/receiver optical sub-assembly and 100G polarization multiplexed quadrature phase shift keying (PM-QPSK) products.
"This bridge loan and the planned sale of ENA Switzerland is a significant step toward putting Enablence on a sound financial footing so that the company can secure its long-term future and continue to provide its customers with reliable and uninterrupted products and services going forward," said Peter Dey, chairman of Enablence.
"Thanks to the continued support of our Tier 1 customers and key suppliers, we have been able to operate normally through the month of June. We expect to report an increase of over 30 percent in revenues for the June quarter as compared to the March quarter. Furthermore, our joint venture company, Sunblence Technologies, has begun shipping its first commercial splitter products and is aggressively ramping up capacity to meet anticipated growth in local access markets. We will provide more details when we report our year-end results later this summer."