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Armtec Infrastructure extends waiver of term loan covenant to Sept. 30
By Angela McDaniels
Tacoma, Wash., July 14 – Armtec Infrastructure Inc. met the senior secured to EBITDA covenant under its term facility with Brookfield Capital Partners Fund III as of June 30 but decided to extend its waiver of that covenant to Sept. 30 from July 15, according to a company news release.
The covenant requires Armtec to maintain a ratio of senior secured debt to EBITDA of no greater than 5.25 times.
The company believes that it is prudent to make the extension as it “works to improve its earnings and cash flow that were impacted in the first half of 2014 by adverse weather conditions, in addition to ongoing lower demand and competitive issues in certain markets,” Mark Anderson, Armtec president and chief executive officer, said in the news release.
The company said its preliminary estimates indicate it met the previously disclosed EBITDA target for the second quarter of 2014 of about C$12 million and had lower than disclosed debt levels.
The option to extend the waiver was granted under an amendment announced by the company on June 11. The amendment also makes available a C$7.5 million short-term credit facility until Sept. 19. The interest rate would be the 30-day Banker’s Acceptance rate plus 1,200 basis points.
Armtec is now required to pay to Brookfield a waiver fee of C$2 million and a standby fee of C$250,000 for the short-term facility, and it will have to pay a draw fee of C$250,000 if it uses the short-term facility.
The company said it will be deferring payment of the waiver fee, the standby fee and, if applicable, the draw fee, and these amounts will be added to the principal of the term facility. These fees, however, will be excluded from future covenant calculations.
Armtec makes infrastructure products and engineered construction solutions and is based in Concord, Ont.
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