Tuesday, February 7, 2012

Northstar Aerospace wins reprieve on debt default

Northstar Aerospace Inc. NAS-T said Monday it has secured forbearance agreements with its lenders on a debt default and with a major customer over a claim of breach of contract.

The aircraft parts maker said its lenders have agreed not to enforce their default-related rights under a credit facility until Feb. 17. The agreement includes stipulations that the interest rate be increased, imposes additional reporting requirements and requires Northstar to work with an outside financial adviser on direction and management of financial matters.

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Northstar also said a major customer who claimed breach of contractual obligations has agreed to hold off from exercising its rights under the contracts until Feb. 17. The unnamed customer has also agreed to give three business days notice before it does exercise any rights under the contracts.

Northstar said it continues discussions with both parties to extend the term of the forbearance agreements to a later date.

The company is also ?evaluating strategic alternatives,? language that indicates it is looking for new partnerships or possibly a sale of part or all of the company.

The company makes helicopter gears, transmissions and other parts.

It has U.S. plants in Chicago and Phoenix, Arizona and Canadian operations in Milton and Windsor, Ont.

Source: http://www.theglobeandmail.com/globe-investor/northstar-aerospace-wins-reprieve-on-debt-default/article2327903/?utm_medium=Feeds:%20RSS/Atom&utm_source=Globe%20Investor&utm_content=2327903

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