Will Syntax-Brillian Survive?
It is probably an understatement to say that Syntax-Brillian (BRLC), makers of the Olevia televisions, is now in deep financial trouble. The stock has fallen about 78% from $3.12 at the beginning of the year to a low of 70 cents. The most recent sell off was prompted by the company or rather the company’s creditors forcing the company to disclose they were in default over 19 covenants of their loan in an 8-K. I have been highly critical of the $250 million financing obtained by Syntax-Brillian back in November in a previous article. The main reason was the terms of the loan had interest rates between 11% to 13% at the time and required the company to issue 5 million warrants, exercisable at 1 penny per share, for Syntax-Brillian common stock. Now, the terms of the loan have become even worse under an amended agreement that took place on February 14, 2007. The new agreement sets the minimum interest rate at 15.5% for prime rate based loans and 13.5% for Libor rate based loans. The compa
