StorMedia Incorporated Secures $20 Million Unsecured Credit Facility with Bank of America

Strategic Insights -

StorMedia Incorporated has entered into a significant financial agreement with Bank of America, securing a $20 million unsecured credit facility to replace its previous secured credit facility with Coastfed Business Credit Corporation. As a result of the company's improved financial position, the terms of the new facility are more favorable, providing a significant boost to the company's liquidity. With this new credit facility, the company will join its existing cash balances, cash flow from operations, and funds available under this new credit facility, which the company believes will be sufficient to meet its cash requirements for the next twelve months.

Key Takeaways:

  • StorMedia Incorporated has secured a $20 million unsecured credit facility with Bank of America to replace its previous secured credit facility with Coastfed Business Credit Corporation.
  • The new facility has more favorable terms due to the company's improved financial position, providing a significant increase in liquidity.
  • The company's principal sources of liquidity will include the new credit facility, $59.5 million in cash and cash equivalents, and $13.3 million in short-term investments.
  • The new credit facility is scheduled to expire on November 30, 1997.
  • StorMedia distributes its disk products to the global market through various channels, including manufacturers of computers, storage systems, and other electronic devices.
  • The company's business is highly dependent on the demand for hard disk drives and thin-film disks.

Statistics:

  • $20 million: The amount of the unsecured credit facility secured by StorMedia Incorporated with Bank of America.
  • $59.5 million: The amount of the company's cash and cash equivalents at September 29, 1995.
  • $13.3 million: The amount of the company's short-term investments at September 29, 1995.
  • $30, 1997*: The expiration date of the new credit facility.
  • 2-1/2 and 3-1/2 inches: The sizes of thin-film disks supplied by StorMedia Incorporated.

Sources:

  • StorMedia Incorporated Press Release (December 11, 1995)
  • PRNewswire wire service (December 11, 1995)