7.0. EDSR 04-12-1993 - Laserfiche WebLink

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,• incentive programs (IDRB, TIF, Revolving Loan, etc. ) Further, DTED funds cannot be drawn until closing documents on the local incentives are evidenced. Loan repayments are proposed as follows : SOURCE TERMS INTEREST RATE IDRB 15 year amortization 10 year balloon Variable DTED Grant-City 10 years 4-1/2% for 5 years Loan 6-% for 5 years EDA Loan 10 years 6% COMPANY NARRATIVE Information on Tescom is outlined in greater detail and is attached to the loan application. Tescom' s Elk River facility currently employs 190 people and an additional 45 jobs will be created as a result of the expansion. Sales from the Elk River facilities exceed $20,000,000 . These sales, combined with the 411 sales from the Watertown, South Dakota facility, exceed $30, 000,000 . A leveraged buy-out (LBO) in December, 1986, prevents the company from reducing the amount of conventional financing for this expansion. While Tescom is still highly leveraged, it has proven the ability to service its debt over the six years since the LBO. FINANCIAL ANALYSIS In July, 1992, the City' s audit firm completed a financial analysis of the company. This was a requirement of the DTED application. The audit firm's findings are attached to this memo. While that opinion is eight months old, staff believes that Tescom' s financial condition has not changed and, therefore, it remains a good candidate for servicing its debt on this expansion project. ACTION REQUESTED Upon its review of the Tescom loan request, the EDA Finance Committee is asked to make a recommendation to the EDA Commissioners on the funding of this loan. The EDA will meet on April 12 , 1993, to consider this matter. 411 RECOMMENDATION I recommend that the EDA Finance Committee approve a $50,000 loan to Tescom Corporation, Inc. , subject to the filing of a