Struggling aircraft designer Avcorp Industries (TSX:AVP) drew down a $6 million loan and extended its debenture with Export Development Canada (EDC) Wednesday.
The company, which designs airframe structures, said the $6 million loan was secured with Panta III B.V., a subsidiary of Panta Holdings B.V., the company’s largest shareholder.
Meantime, Avcorp extended the maturity date of its EDC loan to March 31, 2016.
The company had previously reported that it was not in compliance with the original terms of the 2009 debenture after it failed to pay the principal and interest on the loan as of March 31, according to an Avcorp report.
The interest rate of the debenture remains unchanged, Avcorp said, but the interest due on it can now be paid in the form of common shares of the company.
The news follows a tough first quarter for the company, including a net loss of $1 million and negative cash flow from operating activities.
Business in Vancouver last caught up with Avcorp in December when the company announced that one of its key clients, Cessna Aircraft Co., planned to resume production of its own aircraft parts. (See: “Cessna to re-assume production work from Avcorp” – BIV Business Today, December 20, 2011.)
See Business in Vancouver’s upcoming edition for how Avcorp is strategizing to return to profitability.
At press time, Avcorp’s stock remained unchanged at $0.05.
Joel McKay
Twitter:jmckaybiv