Northstar wins default, contract breach reprieve
Northstar Aerospace Inc. said has secured forbearance agreements with its lenders on a debt default and with a major customer over a claim of breach of contract.
CHICAGO: Northstar Aerospace Inc. said has secured forbearance agreements with its lenders on a debt default and with a major customer over a claim of breach of contract.
The aircraft parts maker that has a plant in Milton, Ont. said its lenders have agreed not to enforce their default-related rights under a credit facility until Feb. 17. The agreement includes stipulations that the interest rate be increased, imposes additional reporting requirements and requires Northstar to work with an outside financial adviser on direction and management of financial matters.
Northstar also said a major customer who claimed breach of contractual obligations has agreed to hold off from exercising its rights under the contracts until Feb. 17.
The unnamed customer has also agreed to give three business days notice before it does exercise any rights under the contracts.
Northstar said it continues discussions with both parties to extend the term of the forbearance agreements to a later date.
The company is also “evaluating strategic alternatives,” language that indicates it is looking for new partnerships or possibly a sale of part or all of the company.
The company makes helicopter gears, transmissions and other parts.
It has US plants in Chicago and Phoenix, Arizona and Canadian operations in Milton and Windsor, Ont.
© 2012 The Canadian Press