Clearwater 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.