Image Seeks New Revolving Credit15 Jan, 2007 By: Erik Gruenwedel
Image Entertainment announced it has given a 120-day termination notice to its $25 million Wells Fargo revolving credit facility in order to seek a separate line of credit with better interest terms.
The Jan. 5 notice was outlined last week in a filing with the Securities and Exchange Commission and is slated to take effect by May 7.
Due to a challenging business year in 2006, Chatsworth, Calif.-based Image had risked not being in compliance with covenants of the credit facility, including establishing minimum EBITDA (earnings before interest, taxes, depreciation and amortization) and had been subjected to increased interest rates, among other amendments, according to SEC filings.
With no outstanding borrowings from the credit line and having secured a $10 million payment advance from DVD replication company Sonopress in addition to $17 million in privately placed senior convertible notes in the past six months, Image was in a position to secure a new credit facility with better terms.
“It was the perfect time to make our move,” said Image COO David Borshell.