Chicago-based advertising screens on shopping trolleys specialist VideOcart Inc has persuaded IBM Corp to let it restructure its $42m debt to IBM, to provide the company with relief from near term debt payments and enable it to attain its business goals: a $22m debt would replace the existing debt, giving VideOcart a one-time balance sheet gain of $20m; terms of the new agreement include waiving all principal and interest payments until July 31, and VideOcart retains its rights under a previous agreement with IBM that allows early repayment of the new $22m debt at any time for $17m in cash; VideOcart also agreed to cancel a warrant granted last year to IBM to buy 540,000 VideOcart shares and grants a new warrant to buy 600,000 shares at $1.75 each; from August 31 to December 31, interest only payments will be due, but payments of $500,000 a month will be due beginning on January 31 1994 and will continue for 35 months, and a balloon payment will be due on December 31 1996, although IBM has the option to convert the balance of the debt into VideOcart common shares at $8 a share on that date.
