6/12/2012 9:20:00 AM
NEWS BRIEFS
Tree Island Renews Capital Financing
Tree Island Wire Income Fund renewed its senior banking facility with Wells Fargo Capital Finance Corporation Canada as Agent for the Canadian and U.S. Lenders. The four year senior secured banking facility has been increased from $35 million to $40 million and now matures on June 11, 2016.
Under the terms of the facility, up to $40 million may be borrowed for Tree Island’s financing requirements in Canadian and/or U.S. dollars. Additionally, a $10 million letter of credit sub-facility will enable Tree Island to open documentary letters of credit for raw material purchases. The amount advanced under the facility at any time is limited to a defined percentage of inventories, accounts receivable and real estate, less certain reserves.
Tree Island also announced today that it has amended the terms of its forbearance debt with both principal vendors. With one of the vendors, Tree Island has entered into a Second Amendment to Forbearance and Payment Agreement.
Under the terms of this agreement approximately $15.8 million in principal debt will be repaid monthly over a ten year amortization period. Interest is non-compounding, will be accrued on a declining balance starting in June 2017 and is payable over a four year period beginning June 2024.
Additionally, approximately US$16.7 million of principal debt for the other vendor will be extinguished with a final payment of $5 million.
“As a result of these transactions, our increased working capital and liquidity greatly enhances our financial position,” stated Fund chairman Amar Doman.
“Tree Island will be able to aggressively source well priced product through these vending relationships,” Doman added. “This is a very important piece of the ongoing restructuring of Tree Island and there is still further work to be done on our cost side such that we can be competitive in our end use markets.”
Higher sales volumes and selling prices produced a 13% increase in revenues to $44 million during the opening quarter of 2012.
For 2011 full-year revenue rose to $150 million, while gross profit improved to $10.5 million. Sales volumes climbed 11% to 110,314 tons. ©2012 GlobalFastenerNews.com
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