Western Digital Completes Restructuring Moves : Finance: Disk-drive maker has issued 5 million shares of stock to raise nearly $40 million. This will be used to pay down its $191-million bank debt, which has been renegotiated.

Completing a financial restructuring begun in 1991, Western Digital Corp. said Thursday that it has issued 5 million additional shares of stock and refinanced its bank debt.

The offering at $8 a share raised about $40 million in cash, less underwriting costs. The manufacturer of computer components will use the proceeds to pay off part of its $191 million in bank debt.

Western Digital also said it has refinanced its debt with lenders so that the company will delay repayment from June 30, 1993, until the end of March, 1995. The company will make $15 million in payments by mid-1993 and thereafter make quarterly payments of $5 million through March 31, 1995. The refinancing was contingent on a successful stock sale.

“This is a major milestone in the continued restructuring of the company that started two years ago,” said Roger W. Johnson, chief executive of the Irvine-based company. “As you look at IBM, you know that no one can ever be comfortable in this industry for more than an hour and a half.”

Investment banks First Boston Co. and Needham & Co. underwrote the stock offering. The volume in trading of Western Digital’s shares on Thursday was 3.5 million, contrasted with an average daily volume during the past year of 202,000.

In the past several years, Western Digital has had financial hard times, including seven consecutive quarters of losses, as it failed to adapt to fast changes in computer product technology. The company began recovering as a price war in the disk-drive industry subsided in 1992. The company, which has annual revenue of more than $900 million, has reported profits for the last two quarters.

In mid-November, the company announced a tentative agreement with the banks to postpone debt payments and pay back part of the debt with the public offering. That removed the specter of a bankruptcy filing that had hung over the corporation, analysts said.

“This is a very good start, and their fundamentals have turned around,” said John Dean, an analyst at the investment bank Salomon Bros. in San Francisco. “They still have to improve their balance sheet.”

Johnson said the company will continue to improve its debt-to-equity ratio, a measure of financial health. He said the company has moved from a 2.2-1 ratio in December to 1.3 to 1. He said the company hopes to reduce that to below 1 to 1.