EECO Negotiating to Sell Computer Keyboard Business

Pressed by its bankers to repay more than $8 million in loans, EECO Inc., a Santa Ana electronics manufacturer, said Wednesday that it is negotiating to sell its computer keyboard business based in Arizona and the Mexican state of Sonora.

EECO wouldn’t disclose its asking price nor identify the buyer.

But a sale of the money-losing keyboard business could put EECO back in the black, Chairman Robert B. Bonney said.

Late last year, EECO was saying it could turn the keyboard business around despite strong competition and internal problems.

The unit, called Maxi-Switch, had already decided to lay off workers to cut costs.

But EECO’s bankers wouldn’t wait. EECO said Wednesday that its major lender extended a loan agreement until the end of March. Then, however, the bank can demand the approximately $8.5 million it is owed.

Under the loan extension agreement, the bank can pull the plug even earlier than the end of the month if the negotiations to sell the keyboard unit fall through.

EECO said that if the bank calls in its loan it isn’t sure it can get financing elsewhere, and it hinted that the company may face bankruptcy.

The bankers had been cooperating in keeping the company afloat, Bonney said.

EECO has struggled since 1986 with falling profits, the ailing keyboard business, a $13.2-million loss in its fiscal 1989 year and a $612,000 loss for the nine-month period ended Oct. 1. The company has been selling some of its assets to repay its loans.

EECO’s computer keyboard unit in Scotland, which the company says is more profitable than the Tucson-based operation, is not part of the sale.

The company also makes electromechanical switches for electronic products like stereos; “pad” or flat, keyboards used in appliances like microwaves and certain phones; and computer systems used to manage hotels.