PNY aims to take leap over financial hurdles cleared

Chip designer and manufacturer PNY Electronics moved fast to quell rumours that it was in financial trouble last week and unveiled details of a refinancing programme.

A representative of the company disclosed that a deal with a syndicate of banks had increased its borrowing capacity by a total of $90 million.

PNY Electronics, which creates Simms but does not produce the memory, expanded credit facilities for its European subsidiary from $9 million to $20 million at the end of February. The US parent's borrowing capacity has now increased from $50 million to $70 million.

The company's president, Gadi Cohen, said that the revised credit facilities will allow PNY to borrow at lower interest rates.

The company did not have an immediate need for additional financing and the extra credit showed it was financially stable and positioned PNY for future expansion, he added.

PNY Electronics posted a sales turnover of $500 million for 1995. Goldman Sachs owns 13 per cent of the company while the refinancing syndicate is headed by the American Corestates Bank.

In the autumn PNY opened a new plant in Santa Clara; it also uses other fabs including a former IBM plant in Bordeaux. A London sales office will open this week or next.