Summary
This 8-K filing from Agilent Technologies, Inc. reports a significant event related to a financial obligation. On March 18, 2008, a subsidiary, Agilent Technologies World Trade, Inc., received a notice from Merrill Lynch Capital Services, Inc. accelerating the repurchase date for 15,000 Class A Preferred Shares of another subsidiary, Agilent Technologies (Cayco) Limited, to July 16, 2008. The repurchase price is $1.5 billion. Agilent Technologies has stated its intention and capability to satisfy this obligation, noting approximately $1.4 billion in unrestricted cash and $1.6 billion in restricted cash as of its last quarter, which could be allocated. The company may also pursue other financing options. Importantly, failure to meet this repurchase obligation by June 16, 2008, would trigger an "event of default" under Agilent's Five-Year Credit Agreement, although the company currently has no debt outstanding under this agreement. The company does not anticipate this event impacting its ongoing share repurchase program.
Key Highlights
- 1Agilent Technologies subsidiary received notice accelerating a $1.5 billion preferred share repurchase obligation to July 16, 2008.
- 2The company possesses sufficient cash reserves ($1.4B unrestricted, $1.6B restricted) to potentially meet the obligation.
- 3Agilent Technologies may explore additional financing to satisfy the repurchase.
- 4Failure to satisfy the obligation by June 16, 2008, will trigger an event of default under the company's Credit Agreement.
- 5No debt is currently outstanding under the Credit Agreement.
- 6The company anticipates recognizing approximately $14 million in non-cash issuance costs due to the acceleration.
- 7The accelerated repurchase is not expected to impact the company's existing share repurchase program.