VANCOUVER, British Columbia, Nov. 07, 2022 (GLOBE NEWSWIRE) — Swiss Water Decaffeinated Coffee Inc. (TSX – SWP) (“Swiss Water” or the “Company”) is happy to announce it has efficiently accomplished the enlargement of its credit score services with its current senior lenders, leading to $33.25 million of incremental capital availability, consisting of $21.25 million of expanded revolving credit score capability and $12 million of incremental senior time period financing.
The elevated revolving credit score capability is being made out there for working capital, notably in gentle of materially elevated gross sales volumes and elevated espresso costs, and the elevated time period financing will fund the completion of the Company’s second manufacturing line in Delta, British Columbia (“Delta 2”), anticipated to be working commercially within the third quarter of 2023.
The expanded financing bundle entails CIBC, Business Development Bank of Canada, Farm Credit Canada, and Mill Road Capital II, L.P. (“Mill Road”), all of the Company’s present senior lenders.
“We would like to thank our lending partners for their support.” stated Frank Dennis, Chief Executive of the Company. “Not only does this important milestone solidify our capital plan for our immediate needs, but it is a statement of support for our Company, and confidence in our team’s ability to continue to grow our business as the market continues to embrace our chemical-free decaffeinated coffee.”
The board of administrators can be happy to announce that Justin Jacobs, Managing Director of Mill Road, has been appointed to the board of administrators, efficient instantly, pursuant to Mill Road’s current board nomination rights. Mr. Jacobs has been with Mill Road because the agency’s founding in 2005; beforehand, he labored at LiveWire Capital, an funding and administration group, and within the non-public fairness group at The Blackstone Group. Mr. Jacobs has been a director at quite a few private and non-private firms, together with British Columbia primarily based PRT Growing Services Ltd. In addition to the Amended Debenture and Amended Warrant referred to under, Mill Road presently holds 608,500 shares of the Company, representing roughly 6.6% of the issued and excellent shares of the Company.
“I am delighted to join the Swiss Water Board.” stated Mr. Jacobs. “The Company has not only successfully navigated challenges related to COVID-19, supply chain headwinds and elevated coffee prices, Swiss Water has also managed to generate record levels of volume and profitability in recent quarters. With this significant expanded financing package completed, the Company is well-positioned to continue its strong performance and complete the capacity expansion at Delta. I look forward to continue working with Frank Dennis and the Company’s entire management team as they further develop Swiss Water as a global coffee company with customers in over 60 countries. I am focused on supporting initiatives to maintain growth and increase profitability to drive returns for shareholders.”
The incremental funds out there below the incremental senior time period financing, along with the Company’s current out there credit score and projected internally generated money stream are anticipated to be adequate to fund the completion of the Delta 2 manufacturing line by the third quarter of 2023. As beforehand reported, the impacts of world macroeconomic pressures, together with inflation, trades disruptions, and provide chain points, turned extra acute in 2022 and precipitated the Company to reassess the projected building prices for Delta 2. The Company now considers 10% of the $45 million value estimate to be an acceptable danger issue and that this danger may be adequately addressed with the incremental senior time period financing secured.
The following is a descriptive abstract of the fabric phrases of the amendments, which pursuant to the foundations of the Toronto Stock Exchange are anticipated to change into efficient 10 business days after the date of this press launch:
Expanded Senior Term Loan. The Company has entered into an modification (the “Amended Senior Facility”) to the prevailing senior debt facility with the Company’s two senior lenders, Business Development Bank of Canada and Farm Credit Canada, which is able to present the Company with as much as a further $12 million of senior debt financing at a beneficial cost, rate of interest and amortization schedule by rising the senior debt facility to $57 million from the present $45 million. The incremental funds out there below the Amended Senior Facility, along with the Company’s current out there credit score and projected internally generated money stream are anticipated to be adequate to fund the completion of the Delta 2 manufacturing line by the third quarter of 2023.
Expanded Revolving Credit Facility. The Company has entered right into a renewal and modification (the “Amended Revolving Facility”) to the prevailing revolving credit score facility with CIBC which gives the Company a further $21.25 million of senior debt financing primarily based on a borrowing base calculation by rising the revolving credit score facility to $51.25 million from the present $30 million. The Amended Revolving Facility will permit the Company to extra effectively finance any working capital necessities as a consequence of will increase in gross sales volumes and occasional costs sooner or later.
Amended Debenture. The phrases of the Company’s current $15 million subordinated debenture (the “Debenture”) held by Mill Road embrace a restrictive covenant that limits the quantity of indebtedness rating senior to the Debenture. In order to allow the Company to entry the elevated funds out there below the Amended Senior Facility and Amended Revolving Facility, the Company additionally introduced that it has entered into an amended and restated subordinated debenture (the “Amended Debenture”) and an amended and restated warrant (the “Amended Warrant”) with Mill Road.
The phrases of the Amended Debenture modify the restrictive covenant to extend the full mixed senior debt restriction from a most of $75 million to a most of $123.25 million. In return the Amended Debenture grants to Mill Road a safety curiosity subordinate to the Amended Senior Debt Facilities, consent rights on any new subject of pari passu debt and a covenant relating to fastened cost protection ratios equal to that below the Amended Revolving Facility. The Amended Debenture gives Company with the appropriate to pre-pay the Amended Debenture at any time previous to maturity.
Amended Warrant. The Amended Warrant extends the train interval of the warrants presently held by Mill Road to April 30, 2026 from October 31, 2024 and gives for a cashless train characteristic. There is not any change to the quantity of shares issuable below the Amended Warrant (2.25 million shares, representing 24.9% of the present issued and excellent shares) or the train value of the Amended Warrant ($3.33 per share, which is a premium of $0.69 and 23.8% over the present market value of the shares, primarily based on the 5 day quantity weighted common value of the shares). Certain current rights of Mill Road relating to the nomination of a director and pre-emptive rights in respect of issuances of shares set out in ancillary agreements at the moment are mirrored within the Amended Warrant itself. The Amended Warrant was negotiated at arm’s size with Mill Road.
The board of administrators decided that getting into into the Amended Senior Facility and Amended Revolving Facility together with the Amended Debenture and the Amended Warrant required to entry the elevated debt financing is in the most effective pursuits of the Company.
The Company is counting on the exemption from minority shareholder approval necessities below part 5.7(1)(f) of Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions (“MI 61-101”), in respect of the Amended Debenture, and below part 5.7(1)(a) of MI 61-101 in respect of the Amended Warrant.
The Company anticipates submitting a fabric change report lower than 21 days previous to the efficient date of the amendments described herein because of the necessity of accessing extra funds, which the Company considers cheap within the circumstances.
Company Profile:
Swiss Water Decaffeinated Coffee Inc. is a number one specialty espresso firm and a premium inexperienced espresso decaffeinator which employs the proprietary SWISS WATER® Process to decaffeinate inexperienced espresso with out the use of chemical solvents. It additionally owns Seaforth Supply Chain Solutions, a inexperienced espresso dealing with and storage business. Both companies are situated within the cities of Burnaby and Delta, British Columbia.
For extra info, please contact:
Iain Carswell, Chief Financial Officer
Swiss Water Decaffeinated Coffee Inc.
Phone: 604.420.4050
Email: [email protected]
Website: investor.swisswater.com
Forward-Looking Statements:
Certain statements on this press launch could represent “forward-looking” statements which contain recognized and unknown dangers, uncertainties and different components which can trigger the precise outcomes, ranges of exercise, efficiency or achievements to be materially totally different from any future outcomes, ranges of exercise, efficiency or achievements expressed or implied by such forward-looking statements. When used on this press launch, such statements could embrace such phrases as “may”, “will”, “expect”, “believe”, “plan” and different comparable terminology. These statements mirror administration’s present expectations relating to future occasions and working efficiency, in addition to administration’s present estimates, however that are primarily based on quite a few assumptions and should show to be incorrect. These statements are neither guarantees nor ensures, however contain recognized and unknown dangers and uncertainties, together with, however not restricted to, dangers associated to processing volumes and gross sales progress, working outcomes, the availability of utilities, the availability of espresso, common trade circumstances, commodity value dangers, know-how, competitors, overseas alternate charges, building timing, prices and financing of capital initiatives, a possible affect of the COVID-19 pandemic, and common financial circumstances.
The forward-looking statements contained herein are made as of the date of this press launch and are expressly certified of their entirety by this cautionary assertion. Except to the extent required by relevant securities regulation, Swiss Water Decaffeinated Coffee Inc. undertakes no obligation to publicly replace or revise any such statements to mirror any change in administration’s expectations or in occasions, circumstances, or circumstances on which any such statements could also be primarily based, or that will have an effect on the chance that precise outcomes will differ from these described herein.
