Digital Lightwave Restructures Debt and Secures $2.5M Line of Credit
Digital Lightwave, Inc. (OTCBB:DIGL), a leading provider of optical networking test equipment and technology, today announced that on April 4, 2008, the Company and Optel Capital, LLC restructured all the outstanding indebtedness owed by the Company to Optel, and Optel agreed to make a $2.5 million line of credit available to the Company for working capital purposes. The restructured indebtedness of $35.7 million and any drawings under the line of credit facility bear interest at a rate equal to LIBOR plus 1.0%.
“This new agreement will give Digital Lightwave the financial stability and flexibility to increase our investment in new product development and expand marketing efforts,” stated Ted Myers, CEO. “Our improved financial strength will also enable us to operate more efficiently and better serve our markets and our customers’ needs while maximizing revenue. While many of our competitors have turned to bankruptcy or have been casualties of acquisition, Digital Lightwave is still Digital Lightwave, a leader in the industry since our first product shipment in February 1996. Our customers can continue to have confidence that we will be stable here for them, as we always have.”
The new note and line of credit are secured by substantially all the Company’s assets, require quarterly payments of interest, and mature on March 31, 2010. Subject to stockholder approval at the Company’s 2009 annual meeting of stockholders, the indebtedness is convertible at the option of Optel into shares of the Company’s common stock. If such holders do not approve the conversion feature, the outstanding debt and accrued interest would immediately become due and payable in full upon demand by Optel at any time after the stockholders’ meeting.
Optel is controlled by Dr. Bryan J. Zwan, the Company’s largest stockholder and chairman of the board of directors. The transaction was approved by the Company’s board of directors upon the unanimous recommendation of a special committee of the board comprised solely of independent directors.
