Hyro settles $20 million debt with Lehman’s

Last year Hyro borrowed $20 million in cash, with a total of $5 million in interest payable over the term of the loan, to increase working capital and build the company. Two major acquisitions made with the funds included Synergy Plus and Getronics Asia.

Bill Votsaris, chief executive officer of Hyro said they had a significant amount of debt in the form of a convertible note from Lehman’s and following the announcement of the Lehman Brothers collapse, decided to ‘jump the queue and conclude the deal’.

“We did a deal with the liquidators of the Lehman’s entities in Hong Kong who held the convertible note. The debt that we would have had to pay them was a total of $20 million plus $5 million in interest over the life of the loan,” said Votsaris. “We’ve paid them interest of $825,000 in interest to date and will now pay them $1.2 million in cash to fully settle the debt.”

The agreement also includes an initial allocation of 80 million ordinary shares in Hyro Limited with an additional 27 million shares to be issued following shareholder approval. Following the issue of these shares, the Lehman Brothers liquidator will hold 17 per cent of the shares in the company.

The fixed and floating charge from Lehman’s has been removed and that leaves the total bank debt for Hyro, including leasing, at under $2 million.

“If we didn’t do it now what would happen is in exactly 14 months from now we would have had to pay back that loan of $20 million, and interest between now and then of another $4.1 million” said Votsaris.

“The digital sector of our market is growing at a phenomenal rate. Hyro plays in the digital services business and it’s having exponential growth, it’s really solid and it’s on the same course, but now has the benefit of being debt free.”