Ferroglobe Announces Closing of $100 Million Asset-Based Revolving Credit Facility
October 11 2019 - 9:12AM
Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe” or the “Company”) today
announced the closing of a new, five-year $100 million North
American asset-based revolving credit facility (the “ABL
Revolver”), between Globe Specialty Metals, Inc. (“Globe”) and QSIP
Canada ULC, each a subsidiary of the Company, as borrowers and PNC
Bank, National Association (“PNC”), as lender and agent.
The ABL Revolver replaces the Company’s
revolving credit facility (the “RCF”). At closing, the initial
drawing under the ABL Revolver together with cash from Ferroglobe’s
balance sheet will be used to discharge in full the Company’s
obligations under the RCF, repurchase certain accounts receivable
from the Company’s accounts receivable securitization program and
pay associated fees and expenses. Going forward, drawings under the
ABL Revolver will be used to fund working capital needs of Globe
and its subsidiaries and for general corporate purposes.
At the current drawn amount, the ABL Revolver
bears interest of L+3%, versus L+3.5% in the RCF. It also has a
minimum liquidity requirement of $32.5 million (including $10
million of undrawn availability under the ABL), compared to a $150
million pledged cash requirement under the RCF prior to September
30, 2019. The maximum amount available under the ABL Revolver is
subject to a borrowing base comprising North American inventory and
accounts receivable of Globe and certain of its subsidiaries.
Finally, it contains no leverage-based or financial ratio-based
covenants.
Pedro Larrea, Ferroglobe’s Chief Executive
Officer commented, “After receiving a number of competitive
committed offers, we elected to proceed with the ABL Revolver
provided by PNC, as it best met our refinancing objectives. We want
to thank PNC for their continuous support to Ferroglobe; for their
flexibility in adapting the structure of the transaction to our
improved balance sheet after the divestiture of FerroAtlántica on
August 30, 2019 and for their dedication to closing a complex
transaction in just a few weeks.”
Mr. Larrea added, “The replacement of the RCF
marks another important step in our overall strategy to de-risk our
balance sheet. The new ABL Revolver has no leverage-based or
financial ratio-based covenants and reduced liquidity requirements
as compared to the RCF, thereby enhancing our flexibility. It
is one element of the refinancing strategy previously announced and
has been structured to complement the additional financing we are
now focusing on, further bolstering our capital structure. We
are also executing an aggressive cash generation plan for the
coming quarters which envisages significant working capital
release. We will update the market on this plan in due course.”
The credit agreement governing the ABL Revolver
(the “Credit Agreement”) contains customary covenants,
representations and warranties and events of default for financings
of this type. The subsidiaries of the Company other than Globe and
its subsidiaries will not be restricted under the negative
covenants in the Credit Agreement.
About Ferroglobe
Ferroglobe PLC is one of the world’s leading
suppliers of silicon metal, silicon- and manganese- based specialty
alloys and ferroalloys, serving a customer base across the globe in
dynamic and fast-growing end markets, such as solar, automotive,
consumer products, construction and energy. The Company is
based in London. For more information, visit
http://investor.ferroglobe.com.
Forward-Looking Statements
This release contains “forward-looking
statements” within the meaning of U.S. securities laws.
Forward-looking statements are not historical facts but are based
on certain assumptions of management and describe Ferroglobe’s
future plans, strategies and expectations. Forward-looking
statements often use forward-looking terminology, including words
such as “anticipate”, “believe”, “could”, “estimate”, “expect”,
“forecast”, “guidance”, “intends”, “likely”, “may”, “plan”,
“potential”, “predicts”, “seek”, “will” and words of similar
meaning or the negative thereof.
Forward-looking statements contained in this
press release are based on information currently available to
Ferroglobe and assumptions that management believe to be
reasonable, but are inherently uncertain. As a result, Ferroglobe’s
actual results, performance or achievements may differ materially
from those expressed or implied by these forward-looking
statements, which are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors
that are, in some cases, beyond Ferroglobe’s control.
Forward-looking financial information and other
metrics presented herein represent Ferroglobe’s goals and are not
intended as guidance or projections for the periods referenced
herein or any future periods.
All information in this press release is as of
the date of its release. Ferroglobe does not undertake any
obligation to update publicly any of the forward-looking statements
contained herein to reflect new information, events or
circumstances arising after the date of this press release. You
should not place undue reliance on any forward-looking statements,
which are made only as of the date of this press release.
CONTACT:
Gaurav Mehta EVP – Investor Relations
Email: investor.relations@ferroglobe.com
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