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Kaypro and lender Commonwealth Financial Corp. have...

Kaypro and lender Commonwealth Financial Corp. have agreed to an “interim plan” by which Kaypro will pay off $3.5 million of the $8-million line of credit debt Kaypro owes to Commonwealth.

The $3.5 million is the part of Kaypro’s debt that is secured by inventory and accounts receivable, a Kaypro spokesman said Monday. The interim plan will be instituted while Kaypro, a Solana Beach computer manufacturer, seeks a “permanent solution to its financial needs.”

Hit by losses and lower-than-expected sales, Kaypro has been chronically short of cash in recent quarters. Kaypro Chairman Andrew Kay has made $2.3 million in personal loans to Kaypro over the two most recent quarters so that the company could pay its bills.

The agreement came after Commonwealth demanded that Kaypro present a restructuring plan to “retire certain debt.” The deadline for agreement on the plan was Oct. 1, but was extended by Walnut Creek-based Commonwealth to Oct. 14.

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Kaypro will meet with Commonwealth officials in early November to “review the interim plan and the company’s progress toward replacing or reducing these lines of credit,” the company said in a statement.


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