Inseego Corp., a leading provider of 5G mobile and fixed wireless solutions, has announced the voluntary payoff and termination of its asset-backed loan facility (ABL Facility) with Siena Lending Group. This strategic move comes as the company strengthens its liquidity position and improves financial results.
Under the terms of the ABL Facility, Inseego was obligated to make monthly payments for fees and interest expenses, regardless of the actual funds borrowed. In 2023 alone, the company incurred $1.9 million in interest expense and fees related to the facility, reflecting the financial burden it imposed.
With the complete repayment and termination of the ABL Facility, Inseego eliminates its outstanding loan balance and avoids future interest expenses associated with the facility. Additionally, the lien on all company assets linked to the ABL Facility will be released, providing further financial flexibility.
Inseego attributes its ability to undertake this action to its improved revenue growth, financial performance, and effective cash management practices. The company expresses confidence in its liquidity position to meet future working capital needs.
The repayment process, initiated during the week of April 15, 2024, involved settling the outstanding balance and related termination fees, totaling approximately $3.0 million. Additionally, an exit fee of $400,000 will be paid to South Ocean Funding, LLC, and North Sound Ventures, LP, as a result of the early redemption of their last-out subordinated participation interest in the Loan and Security Agreement.
South Ocean Funding, LLC, and North Sound Ventures, LP are affiliates of Golden Harbor, Ltd., and North Sound Management, Inc., respectively, both beneficial owners of over 5% of Inseego’s outstanding common stock. James Avery, a member of Inseego’s Board of Directors, currently serves as Senior Managing Director of Tavistock Group, an affiliate of South Ocean Funding, LLC.
