Shimmick Corporation (NASDAQ: SHIM) disclosed today that it could not file its Q1 2024 report on time due to a default on its credit agreement. The construction company, which was supposed to submit its Form 10-Q for the quarter ended March 29, 2024, is in breach of a leverage covenant of its Revolving Credit Facility Agreement. This has led to ongoing discussions with the lender to negotiate a waiver or amendment.
The default gives the lender the right to demand immediate repayment of the approximately $32 million owed by Shimmick Corporation. As of now, the lender has not exercised this right, and the company is actively seeking alternative financing options. Still, should the lender decide to call in the debt and Shimmick is unable to secure a waiver or alternative funding, the company's operational continuity could be at risk.
The company's current situation underlines the potential repercussions of not adhering to financial covenants agreed upon with lenders. If Shimmick Corporation fails to renegotiate the terms or find new financing, it may face significant challenges that could affect its status as a going concern.
This announcement is based on a recent statement from Shimmick Corporation filed with the Securities and Exchange Commission. The company's shares are publicly traded, and any developments in this matter could influence investor decisions.
The situation remains fluid as negotiations continue and the company explores other financial avenues to resolve the default and maintain its operations.
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