PERMA-PIPE INTERNATIONAL HOLDINGS, INC. : conclusion of a material definitive agreement, creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant, financial statements and supporting documents (Form 8-K)

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Article 1.01. The conclusion of an important definitive agreement.

At September 17, 2021, Perma Pipe International Holdings, Inc. (“Holdings”) and certain of its US and Canadian subsidiaries (collectively with Holdings, the “North American Loan Parties”) have signed an extension to Holdings’ existing revolving credit and guarantee agreement (the ” “) with PNC Bank, National Association, as Administrative Agent and Lender (“PNC”), providing for a further period of five years $ 18 million Senior secured revolving credit facility, subject to a borrowing base comprising various reserves (the “Senior Credit Facility”). Holdings’ obligations under the Senior Credit Facility are currently secured by Perma-Pipe Canada, Inc. Each of the North American Loan Parties other than Perma-Pipe Canada, Inc. is a borrower under the Senior Credit Facility (collectively, the “Borrowers”).

The Borrowers will use borrowings under the new Senior Credit Facility (i) to finance future capital expenditures; (ii) to finance current working capital requirements; and (iii) for other business purposes. Borrowings under the Senior Credit Facility will bear interest at a rate equal to another prime rate, the London Inter-Bank Offered Rate (“LIBOR”) or a successor rate index LIBOR, plus, in each case. , an applicable margin. The applicable margin will be based on a fixed cost coverage rate range (“FCCR”). The interest on the loans at the alternative base rate will be the alternative base rate as defined in the Senior Credit Facility plus an applicable margin ranging from 1.00% to 1.50%, based on the FCCR for the period. the most recent. Interest on borrowings at LIBOR or at the successor rate to LIBOR will be the LIBOR rate as defined in the Senior Credit Facility plus an applicable margin ranging from 2.00% to 2.50%, based on the FCCR of the most recent period. In addition, the Borrowers will pay a facility fee of 0.25% per annum on the unused portion of the Senior Credit Facility.

Subject to certain exceptions, the borrowings under the Senior Credit Facility will be secured by substantially all of the assets of the North American creditors. The Senior Credit Facility will mature on September 20, 2026. Subject to certain qualifications and exceptions, the Senior Credit Facility contains restrictive covenants which, among other things, restrict the ability of North American creditors to create liens, merge or consolidate, make acquisitions, make investments, dispose of assets, incur debt and pay dividends and other distributions. In addition, the parties to the North American loan cannot incur capital expenditures in excess of $ 5 million annually (plus a limited carry forward of unused amounts).

The senior credit facility also contains financial covenants requiring parties to the North American loan to achieve a ratio of their EBITDA (with certain additional adjustments) to the sum of expected cash principal payments on debt for borrowed money and interest payments on advances under the senior credit facility. Facility (excluding the elements of calculation linked to the financial performance of foreign subsidiaries not party to the credit agreement) of at least 1.10 to 1.00 if, for five consecutive days, the unused availability is less To $ 3,000,000 or any day when the unused availability is less than $ 2,000,000. If the commitment is triggered, it will be tested for the nine month period ending October 31, 2021 and the twelve month period ending January 31, 2022 and thereafter on a rolling twelve month basis. At the most recent closing date, the calculated ratio was significantly above 1.10 to 1.00.

The Senior Credit Facility contains typical events of default. If an Event of Default occurs and continues, then PNC may terminate all covenants to extend additional credit and report all amounts due under the Senior Credit Facility immediately due. In addition, if any of the parties to the North American loan or some of their subsidiaries are the subject of voluntary or involuntary proceedings under bankruptcy, insolvency or similar law, then all outstanding obligations. under the Senior Credit Facility will automatically become immediately due and payable. Loans outstanding under the Senior Credit Facility will bear interest at a rate of 2.00% per annum in addition to the rate otherwise applicable (i) while a bankruptcy event exists or (ii) on demand. lenders, for the duration of any other event of default.

The description of the Senior Credit Facility set forth above is qualified by reference to the Senior Credit Facility filed attached as Exhibit 10.1 and incorporated herein by reference.

Article 2.03. Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant.

The information included in section 1.01 above is incorporated herein by reference.


 Item 9.01.   Financial Statements and Exhibits.
(d)  Exhibits. The following exhibits are being filed herewith:

Exhibit
 Number  Description
         Second Amendment and Waiver to Revolving Credit and Security Agreement,
         dated September 17, 2021, among the North American Loan Parties, PNC and
  10.1   the other parties thereto.
         Cover Page Interactive Data File (embedded within the Inline XBRL
  104    document)




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