AP
Syntax-Brillian Down After Credit Change
Friday February 22, 11:18 am ET
Syntax-Brillian Shares Tumble After Company Amends Credit Agreement Terms NEW YORK (AP) -- Shares of Syntax-Brillian Corp.
plunged Friday after the high-definition TV maker said it amended the terms of its credit and guaranty agreement from last October.
"The amendments, while likely necessary for its creditors to somewhat preserve their investment, have severely restricted Syntax-Brillian's ability to operate," wrote Canaccord Adams analyst Jonathan Dorsheimer in a note to investors Friday.
In a filing with the Securities and Exchange Commission Thursday, Syntax-Brillian said it amended its credit pact with certain lenders to establish a floor of 15.5 percent for interest rates on base rate loans. The amendments also require the company to make more than $8 million in payments, and according Dorsheimer, accept "a loss of operational autonomy."
"The difficult macro environment and company-specific issues such as a consistent lack of capital and negative free cash flow have come to a head for Syntax-Brillian," wrote Dorsheimer in a note to investors. He kept a "Hold" rating on the stock.
Syntax-Brillian shares fell 48 cents, or 31.8 percent, to $1.03 morning trading. They earlier hit a year low of 83 cents, below a previous low of $1.51 hit Thursday. The stock is down substantially since closing 2007 at $3.08.
