Item 1.01Entry into a Material Definitive Agreement.
Shiloh Industries, Inc., a Delaware corporation (the “Company”), and Shiloh Holdings Netherlands B.V., a besloten vennootschap met beperkte aansprakelijkheid organized under the laws of the Netherlands, as the borrowers, and certain domestic subsidiaries of the Company, as the guarantors, entered into an amendment, dated June 11, 2020 (the “Amendment”), with respect to the Credit Agreement, dated as of October 25, 2013, as previously amended as of December 30, 2013, June 26, 2014, September 29, 2014, April 29, 2015, October 15, 2015, October 28, 2016, July 31, 2017, October 31, 2017 and June 6, 2019 (the “Existing Credit Agreement” and together with the Amendment, the “Credit Agreement”), with the lenders party thereto and Bank of America, N.A., as administrative agent, swing line lender and an L/C issuer.
The Amendment, among other things:
(a) waives the maximum leverage ratio and minimum interest coverage ratio financial covenants under the Existing Credit Agreement for the fiscal quarters ending April 30, 2020 and July 31, 2020;
(b) adds financial covenants which require the Company to (i) maintain week-end liquidity of at least (1) $40 million for the period from June 13, 2020 through June 26, 2020, (2) $35 million for the period from June 27, 2020 through July 11, 2020, and (3) $30 million from July 12, 2020 through October 31, 2020, and (ii) limit capital expenditures to $15 million for the period from May 1, 2020 through August 31, 2020;
(c) adds, limits or otherwise modifies certain debt, disposition and investment baskets;
(d) provides that (i) revolving loans and swingline loans shall bear interest at a rate equal to the base rate or LIBOR plus an applicable margin of 4.00% in the case of base rate loans or 5.00% in the case of LIBOR loans, (ii) the Company shall pay a commitment fee on the unused portion of the revolving commitments at a rate of 0.65% per annum and (iii) revolving loans bearing interest at the LIBOR rate shall be subject to a LIBOR floor of 1.00%; provided, that, in case of clauses (i) and (ii), if the Company demonstrates, based on the Compliance Certificate for the fiscal quarter ending July 31, 2020, that (A) the Consolidated Leverage Ratio as of the end of the fiscal quarter ending July 31, 2020 does not exceed 4.25 to 1.0 and (B) the Consolidated Interest Coverage Ratio as of the end of the fiscal quarter ending July 31, 2020 is greater than or equal to 3.50 to 1.0, then applicable margin shall revert to the pricing grid that was in effect prior to the Amendment; and
(e) includes certain transactional milestones for the Company.
The Amendment does not modify the aggregate revolving commitments provided under the Existing Credit Agreement.
Certain of the lenders under the Credit Agreement and their affiliates have provided from time to time, and may continue to provide, investment banking, commercial banking, financial and other services to us for which we have paid and intend to pay customary fees and expense reimbursements.
The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.