Tech group Telit se­cures re­prieve from banks


Telit, the in­ter­net of things busi­ness shaken this year when its former chief ex­ec­u­tive was linked to a US fraud in­dict­ment, has se­cured a waiver from its lenders to pre­vent it breach­ing covenants.

The com­pany, which sells ma­chine-to-ma­chine tech­nol­ogy and has been in early stage talks to sell its au­to­mo­tive di­vi­sion, said HSBC, its main lender, would waive the key fi­nanc­ing tests that it would oth­er­wise have failed on New Year's Eve. Lon­don­listed Telit has had a dif­fi­cult few months af­ter it sev­ered ties with Oozi Cats, its former chief ex­ec­u­tive, fol­low­ing al­le­ga­tions of his links to a US fugi­tive by the name of Uzi Katz, who had been in­dicted for wire fraud in Bos­ton in 1992.

Mr Cats re­signed in Au­gust af­ter Telit said: "The ev­i­dence shows that an in­dict­ment was is­sued against Oozi Cats in the US and that this fact was know­ingly with­held from ad­vis­ers."

The group is­sued a profit warn­ing for 2017 in Septem­ber and said it was re­view­ing its op­er­a­tions and fi­nances. In Oc­to­ber it emerged that Telit was in talks to sell its au­to­mo­tive di­vi­sion, which spe­cialises in chips sup­port­ing in­ter­net of things net­works and whose cus­tomers in­clude Tesla. Such a deal would bring much needed cash to the busi­ness, which a source con­nected with the com­pany said was one rea­son Telit's banks had been will­ing to waive covenants.

Pri­vate eq­uity com­pa­nies in­clud­ing Berk­shire Part­ners, Vec­tor Cap­i­tal, Apax, Ad­vent and Bat­tery Ven­tures have showed in­ter­est in buy­ing the au­to­mo­tive di­vi­sion.

"The board is pleased to re­port that the group's lead­ing fi­nanc­ing bank has granted an ad­vance waiver for the po­ten­tial breach of covenants as at 31 De­cem­ber 2017," Telit said on Thurs­day.

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