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Stanley Prepays $15 Million Debt
December 16,
2010 by in UnCategorized 
By Home Furnishings Business in Business Strategy on December 17, 2010
Stanley Furniture Co. (NASDAQ: STLY) has pre-paid in full an outstanding note with
Prudential Insurance Co. of America and other lenders.
The amount prepaid was $15 million plus accrued interest.
In connection with the payment, the lenders agreed to waive the yield-maintenance premium due on prepayment provided under the agreement. The company's cash on hand after the payment was about $19 million.
Stanley also noted that it expects to receive $2.3 million prior to the end of the year from the sale of machinery and equipment no longer needed because of the factory closure in its Stanleytown, Va., facility.
"The successful completion of our rights offering announced last week, together with the equipment sale and our progress with the previously announced restructuring program, allows us to eliminate our outstanding debt and the associated $1.2 million of annual interest expense, said Micah Goldstein, chief operating and financial officer. We believe we have sufficient liquidity to complete our transition and have avoided a significant prepayment penalty otherwise required under the note agreement. This prepayment also provides us additional flexibility to execute our strategy without restrictive debt covenants.