Decorator Industries Inc. announced Tuesday (Oct. 6) that on Sept. 30, the company negotiated a modification to its loan agreement with Wachovia Bank.
The modification agreement extends the maturity date of the loan agreement to Dec. 31, 2010, changes the interest rate to prime rate plus 2% and limits the outstanding balance to the lesser of $4 million or 75% of the appraised value of six of the company’s properties which are now unencumbered, according to a news release. Decorator expects the real estate appraisals to fully support the $4 million of availability.
Wachovia Bank will secure repayment of the loan by collateralizing this real estate. Should any of this real estate be sold, the company explained, the net proceeds will pay down the loan and reduce the available loan limit dollar for dollar.
In addition, the loan modification allows Pembroke Pine, Fla.-based Decorator to establish an additional credit line with an asset-based lender using all of Decorator’s accounts receivable and inventory as collateral. This should provide as much as $2 million of additional working capital availability.
“I am pleased that we negotiated the best agreement available in such a difficult economic environment,” said William Johnson, president. “I am confident that the modification provides the financial resources to successfully weather this economic storm. Now we must refocus our efforts on the long term profitability of Decorator Industries.”
Decorator Industries designs, manufactures and sells interior furnishing products, principally draperies, curtains, shades, blinds, valance boards, bedspreads, comforters, pillows, cushions and trailer tents.
The company supplies the RV and manufactured housing industries and is a growing supplier to the lodging industry.