IRT Corp., the troubled radiation technology company...
IRT Corp., the troubled radiation technology company that is in the midst of a corporate restructuring, disclosed in regulatory filings that one of its lenders has refused to extend terms of an overdue $5-million loan, raising the possibility that the lender may attempt to throw IRT into involuntary bankruptcy or foreclosure proceedings.
The lender, Citicorp of New York, is studying a actions that include foreclosing on IRT assets securing part of the loan, bringing suit to enforce payment of such loan or commencing proceedings under insolvency and bankruptcy laws.
IRT, which missed a Sept. 30 payment on the Citicorp loan secured by a senior subordinated promissory note, is “not currently able to pay the principal on the note or to make current interest payments,” the company said. Citicorp and IRT entered into the loan agreement, which also called for Citicorp to receive a warrant to purchase 550,000 shares of IRT stock, in August, 1987.
Citicorp has refused to grant IRT further waivers on the loan default. IRT spokeswoman Alison O’Brien refused to comment on what action IRT is taking to pay off the loan or what Citicorp is doing to recover its money. Citicorp executive Bruce Hall, who is handling the IRT loan, did not return a telephone call for comment.
IRT has been in technical default of the Citicorp loan and on a $7.2-million line-of-credit loan from Sanwa Bank California since early 1988. IRT was granted a waiver on the default of the Sanwa Bank loan pending the sale of its Electronic Systems Group to Maxwell Laboratories of San Diego.
Proceeds from the sale of ESG, to be voted on at a shareholders meeting Monday, will go toward paying down the Sanwa loan, IRT said in the filing. Even after such payment, however, IRT will continue to owe at least $2 million to Sanwa Bank and the $5 million to Citicorp, IRT said in its filing.
The company also disclosed that it has retained an investment banker to solicit outside equity investments in the company. Because of its financial problems, IRT has often been unable to meet its cash requirements in recent years. To pay its bills, IRT has sold assets and raised money though the sale of stock to its directors, including Chairman Clifford Brokaw.