General Automation Pays Off $1.4-Million Debt

General Automation Inc. has paid $1.4 million to a group of private investors ahead of schedule, eliminating its debt and saving an estimated $90,000 in interest payments.

The notes--issued in May and due in June, 1987--were used in June as the initial cash payment in a negotiated plan that eliminated most of General Automation’s $15-million bank debt, said John D. Murray, vice president of finance for the company.

The plan called for General Automation’s banks to accept a combination of cash, stock and warrants as payment for loans. As a result, the Anaheim maker of computer systems saw its debt--which reached a high of $48.3 million in 1980--reduced to the $1.4 million owed the private investors. The notes were retired early, Murray said, because interest was scheduled to begin accruing Oct. 1 and because early payment “establishes financial credibility for the company.” Part of the proceeds from a 1.5-million-share public offering in August, which netted the company $6.2 million, were used to pay off the notes.

As previously reported, General Automation reported a net loss of $4.5 million for the nine months ended May 3, compared to a loss of $6.7 million for the same period a year earlier. Revenue during the nine months fell 43% to $24.8 million from $43.7 million. Fourth-quarter and year-end figures are expected to be released at the end of this month, company officials said.