More financial details re: Gigaom’s debt

There’s been a fair bit written about what helped to take Gigaom down a week and a half ago, and the role that debt played in the company’s failure (I wrote a personal take on the demise of the company). In a story about the shut-down, Peter Kafka at Re/code reported that sources told him the company borrowed $5 million in a debt round led by Western Technology Investments in 2011 and then borrowed even more debt after that. According to his story, by the end of last year, Gigaom was paying a total of $400,000 a month for rent and debt-service costs.

Thanks to Wong Joon Ian, an investigative reporter working for Coindesk who looked at securities filings from WTI, we have a few more details about the company’s debt load. According to SEC documents, the original loan from WTI was actually $4.7 million, but it came at the end of 2012 rather than in 2011 — and based on subsequent filings by WTI, Gigaom was paying more than $400,000 a quarter to service that single loan.

SEC records show that by the end of last year, Gigaom still had about $2.5 million remaining to pay on the loan, which was set to mature in February of next year. That means that in order to get current with its lender by the end of the loan period, the company would have had to boost its payments to $600,000 a quarter or find some other way of getting an injection of new funds. And it had at least $12 million more in debt outstanding apart from that WTI loan, according to Kafka’s story.

Joon Ian also notes that in an interview, the head of Western Technology Investment said that his firm likes to put borrowers who can’t pay their loans into what he called “friendly foreclosure,” so that they don’t have to file for bankruptcy, thus improving their chances of raising new funding or being acquired. Gigaom is reportedly talking with a number of media entities about acquiring some or all of its remaining assets, including the name and archive of published articles, as well as the company’s mailing list and possibly its events business.

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