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2009-06-18 01:33:25 CEST 2009-06-18 01:34:34 CEST REGULATED INFORMATION Clearwater Finance Inc. - Company AnnouncementClearwater successfully completes refinancingClearwater successfully completes refinancing /NOT FOR DISTRIBUTION TO UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES/ HALIFAX, June 17 /CNW/ - (TSX:CLR.UN, CLR.DB, CLR.DB.A): · Management completes successful refinancing of maturing debt facilities Today, Clearwater Seafoods Limited Partnership ("Clearwater") reported that working with GE Capital Markets (Canada) Ltd. and GE Capital Markets, Inc. it has completed agreements to successfully refinance and repay its maturing debt facilities. As previously announced, the refinancing will consist of a new $60 million revolving debt facility with a three-year term fully underwritten by GE Capital in Canada and a new $59.5 million term loan with a three year term. The term facility was underwritten by GE Capital, Export Development Canada (“EDC”), The Business Development Bank of Canada ("BDC"), and the Province of Nova Scotia, through the Industrial Expansion Fund. Both of these new facilities contain positive covenants, including without limitation, minimum earnings before interest, taxes, depreciation and amortization levels to debt levels and additional negative covenants, including without limitation, restrictions on capital spending and asset dispositions, restrictions on incurring additional indebtedness and limitation on the payment of distributions. There are also provisions for cash sweeps that, depending on annual cash flows, could result in additional payments being made on the term debt. During the course of the refinancing Clearwater and Glitnir Banki hf reached an agreement to resolve its dispute concerning any potential liability associated with foreign exchange derivative contracts entered into with Glitnir. Under the agreement all outstanding derivative contracts will be closed. The potential liability under these contracts will be capped at $13.97 million (the liability recorded at April 4, 2009 in Clearwater's first quarter 2009 financials for these contracts was $19.6 million). Clearwater has agreed to commence litigation on its position that these contracts are null and void and there is no liability under the contracts. If Clearwater is successful, there is a minimum settlement of $2.9 million represented by a note secured by a subordinated charge on all of Clearwater's assets. The note is due September 15, 2012. To the extent Clearwater is not successful in its position, Clearwater will become liable for the difference between the final amount due, subject to the $13.9 million cap, less the $2.9 million minimum, under a second secured note due the later of September 15th, 2012 and 30 days after the final court ruling. Both notes will bear interest at Libor plus 7% until such time as they are settled. Interest is accrued annually and will be payable upon maturity of the notes. Both notes are subject to a subordination agreement with the senior lenders. "As Agent on both the working capital and term facilities, GE Capital is pleased to play a key role in the refinancing of Clearwater's secured debt obligations. Our commitments, in partnership with the Government of Nova Scotia, EDC and BDC, will provide stable secured financing for the company and allow management to continue to focus on maintaining strong operational performance," commented Ellis Gaston, Managing Director of Corporate Finance at GE Capital in Canada. About Clearwater Clearwater has operations employing more than 1,200 employees throughout Nova Scotia and is recognized for its consistent quality, wide diversity and reliable delivery of premium seafood, including scallops, lobster, clams, coldwater shrimp, crab and ground fish. Since its' founding in 1976, Clearwater has invested in science, people, technology, resource ownership and resource management to preserve and grow its seafood resource. This commitment has allowed it to remain a leader in the global seafood market. For further information: Robert Wight, Chief Financial Officer, Clearwater, (902) 457-2369; Tyrone Cotie, Director of Corporate Finance and Investor Relations, Clearwater, (902) 457-8181. |
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