Business
TechPrecision Announces Closing of Strategic Acquisition
Raises $3.2 Million in Capital; Executed Amended and Restated Credit FacilityWESTMINSTER, MA / ACCESSWIRE / August 26, 2021 / TechPrecision Corporation
About this update from Techprecision Corporation
[{"type":"text","content":"Raises $3.2 Million in Capital; Executed Amended and Restated Credit FacilityWESTMINSTER, MA / ACCESSWIRE / August 26, 2021 / TechPrecision Corporation (OTCQB:TPCS) (\"TechPrecision\" or the \"Company\"), an industry-leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the defense and precision industrial sectors, today reported that it completed its acquisition of Stadco, located in Los Angeles, a key supplier of large flight-critical components for several high-profile commercial and military programs, including military helicopters, and closed on a private placement financing and new loans from its current bank, Berkshire Bank, the proceeds of which were used to settle Stadco's debt and acquire the outstanding shares of Stadco.The purchase of Stadco is based on the Company's opinion that it is a prime turnaround prospect. We believe we can end the cycle of what we believe were badly negotiated contracts by Stadco's pre-November 2014 management and financial shortages and economic woes that have crippled Stadco since it was last acquired in November 2014. With working cash no longer an issue and the new cycle of defense contracts being negotiated on more favorable terms, we believe we have found an opportunity with a company that not only fits our primary defense focus but could complement both Stadco and Ranor's businesses as they are very similar in what they do but at the same time do work that the other does not or cannot do.We did NOT buy Stadco based on its past financial performance, we bought it for its future.Key Terms of the Stadco AcquisitionThe Company issued approximately 1.5 million shares of its common stock to satisfy Stadco's indebtedness to its shareholders and certain other debt holders and acquire all outstanding shares of Stadco.The Company paid to Stadco's landlord approximately $750,000 in past due rent, which included a forgiveness of an equal amount of past due rent, to bring rent current and included waiver of all penalties, interest and other reimbursements. We also negotiated a reduced rental amount going forward.The Company purchased Stadco's loan from Sunflower Bank, for a total amount of approximately $7.9 million in cash, which included a reduction of its loan indebtedness by $1.4 million.The Company reached an agreement wit...