ENGlobal Corporation: 8K - Letters of Credit Filing

http://www.sec.gov/Archives/edgar/data/933738/000117184313002557/f8k_062013.htm


Item 8.01     Other Events


As previously reported, the Registrant’s lenders issued approximately $12.8 million in letters of credit to a client in July 2011 on the Company’s behalf to support its performance on an international Automation project (“Performance Letters of Credit”).  These Performance Letters of Credit were issued outside of the Registrant’s working capital facility with its current senior lender.


On June 17, 2013, its Performance Letters of Credit were allowed to expire.  The Registrant has proposed an alternative option to modify terms of future retention amounts to replace the Performance Letters of Credit, which is currently under consideration.


As a result, the Registrant expects its project-specific credit agreement will be terminated and approximately $7.1 million in collateral will be released to its senior lender.

Editor's Note: These Performance Letters of Credit were for the Caspian Sea Project.