Pentacon Challenges Lenders by Not Making Interest Payment

John Wolz

Pentacon Inc. announced it did not make the October 1, 2001, interest payment on its 12 1/4% notes and is negotiating with its lenders to refinance its debt.
Penatcon has a 30-day grace period to make the interest paymetn before such nonpayment would become default.
Pentacon reported a positive cash flow for the third quarter of 2001, but due to the events of September 11, 2001, on its aerospace business, the company has downgraded its economic outlook.
“The company also is continuing to consider a variety of other potential transactions with a view toward strengthening its financial wherewithal,” according to a company statement. Pentacon is seeking to restructure financially and recapitalize.
“No assurance can be made that Pentacon will be able to negotiate successfully with its creditors or will make the interest payment prior to an event of default,” the statement added.
Default could result in acceleration of the maturity of Pentacon�s indebtedness.
Houston-based Pentacon distributes fasteners and small parts from 35 U.S. distribution centers and sales offices in Europe, Canada, Mexico and Australia. Web: pentacon-inc.com �2001 FastenerNews.com