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Bank Borrowing Bank Borrowing | 3 Months Ended
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Sep. 30, 2018
Debt Disclosure [Abstract] |
Bank Borrowing | Bank Borrowings On May 9, 2018 (the “Effective Date”), the JV Company entered into a lease finance agreement and a security agreement (the “Agreements”) with YinHai Leasing Company and China Import/Export Bank (the “Lenders”). Pursuant to the Agreements, the Lenders agree to provide an aggregate of Chinese Renminbi (RMB) 400.0 million, or $62.8 million based on the currency exchange rate between RMB and U.S. Dollars on the Effective Date, of financing to the JV Company (the “Lease Financing”). In exchange for the Lease Financing, the JV Company agrees to transfer title of its assembly and testing equipment to the Lenders, and the Lenders lease such equipment to the JV Company under a five-year lease arrangement, pursuant to which the JV Company makes quarterly lease payments to the Lenders consisting of principal and interest based on a repayment schedule mutually agreed by the parties. The interest under the Lease Financing is accrued based on the China Base Rate multiplied by 1.15, or 5.4625% on the Effective Date. Under the Agreements, at the end of the five-year lease term, the Lenders agree to sell such equipment back to the JV Company for a nominal amount (RMB 1). The JV Company’s obligations under the Lease Financing are secured by the land and building owned by the JV Company (the “Collateral”). The proceeds from the Lease Financing will be used primarily for the acquisition and installation of the 12-inch fabrication equipment and other expenses of the JV Company relating to the completion of the fabrication facility located in Chongqing. The Agreements contain customary representation, warranties and covenants, including restrictions on the transfer of the Collateral. The Agreements also contain customary events of default, including but are not limited to, failure to make payments and breach of material terms under the Agreements. The Agreements include certain customary closing conditions, including the payment of deposit by the JV Company. As of September 30, 2018, the outstanding balance under the Agreement was 400 million RMB (equivalent of $58.2 million based on the currency exchange rate as of September 30, 2018), which was recorded under short-term and long-term capital lease liabilities. Capital lease liabilities include financing lease, computer software and exclusive technology rights. Future minimum lease payments are as follows (in thousands):
Year ending June 30, |  |  |
2019 (Remaining) |  |  | $ | 6,549 |
2020 |  |  | 14,201 |
2021 |  |  | 17,777 |
2022 |  |  | 16,907 |
2023 |  |  | 12,255 |
Thereafter |  |  | — |
Total minimum lease payments |  |  | 67,689 |
Less amount representing interest |  |  | (8,871 | )
Total capital lease liabilities |  |  | $ | 58,818 |
On May 1, 2018, Jireh Semiconductor Incorporated ("Jireh"), a wholly-owned subsidiary of the Company, entered into a loan agreement with a financial institution (the "Bank") that provided a term loan in an amount of $17.8 million. The obligation under the loan agreement is secured by certain real estate assets of Jireh and guaranteed by the Company. The loan has a five-year term and matures on June 1, 2023. Beginning June 1, 2018, Jireh shall make consecutive monthly payments of principal and interest to the Bank. The outstanding principal shall accrue interest at a fixed rate of 5.04% per annum on the basis of a 360-day year. The loan agreement contains customary restrictive covenants and includes certain financial covenants that require the Company to maintain, on a consolidated basis, specified financial ratios. As of September 30, 2018, the outstanding balance of the term loan was $17.5 million. On August 15, 2017, Jireh entered into a credit agreement with the Bank that provided a term loan in an amount up to $30.0 million for the purpose of purchasing certain equipment for the Company's fabrication facility located in Oregon. The obligation under the credit agreement is secured by substantially all assets of Jireh and guaranteed by the Company. The credit agreement has a five-year term and matures on August 15, 2022. In January 2018 and July 2018, Jireh drew down the loan in the amount of $13.2 million and $16.7 million, respectively. Beginning in October 2018, Jireh is required to pay to the Bank on each payment date, the outstanding principal amount of the loan in monthly installments. The loan accrues interest based on an adjusted London Interbank Offered Rate ("LIBOR") as defined in the credit agreement, plus specified applicable margin in the range of 1.75% to 2.25%, based on the outstanding balance of the loan. The credit agreement contains customary restrictive covenants and includes certain financial covenants that require the Company to maintain, on a consolidated basis, specified financial ratios and fixed charge coverage ratio. As of September 30, 2018, the outstanding balances of the term loan were $29.8 million. Maturities of Jireh debt were as follows (in thousands):
Year ending June 30, |  |  |
2019 (Remaining) |  |  | $ | 6,255 |
2020 |  |  | 8,340 |
2021 |  |  | 8,340 |
2022 |  |  | 8,340 |
2023 |  |  | 16,028 |
Total debt, excluding debt issuance costs |  |  | 47,303 |
Less: debt issuance costs |  |  | (257 | )
Total debt, less debt issuance costs |  |  | $ | 47,046 |
In November 2018, the Company obtained a waiver from the Bank with respect to the term loans in Jireh which, among other things, waived the Company's violation of the minimum Adjusted Quick ratio covenant as required. Adjusted Quick ratio is the ratio of (a) current assets excluding inventory to (b) the sum of current liabilities plus the total amount of debt owing to the Bank and any other bank affiliate. Following the execution of such waiver, as of September 30, 2018, we were in compliance with all covenants under the term loans.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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