Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) has renegotiated the loan terms with Israeli banks. The banks extended the loans’ maturity dates, reducing payments on the principal in 2013 and 2014 from $105 million to $30 million.
The outstanding loan of $131 million, which was originally set to be paid starting September 2013, will be payable in 10 quarterly installments, starting on March 2014 and ending on June 2016. Two installments of $5 million will be paid in March and June 2014; two installments of $10 million will be paid in September and December 2014; two installments of $15 million will be paid in March and June 2015; three installments of $20 million will be paid in September 2015, December 2015 and March 2016; and a final $11 million installment will be paid in June 2016.
Tower may repay the principal early, based on amounts that the company may raise from new funding sources. The agreement also updates the covenants and financial ratios to align with the company's updated business plan.
"We are pleased to work with banks, who in addition to being debt holders are significant stakeholders of the company, and demonstrate their belief in TowerJazz and in its strategy by providing means for the company to more strongly invest in its strategic plans", said Tower CEO Russell Ellwanger.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2013
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