Babcock & Wilcox Enterprises amended its credit agreement. According to an 8K filed with the SEC, Bank of America is the administrative agent for the agreement. The amendment replaces and supersedes a previously disclosed agreement to refinance the company’s senior debt by May 15. Under the terms of the amended credit agreement, B&W’s current revolving credit facility and availability for letters of credit will be extended for two years with a maturity date of June 30, 2022.
In addition, B. Riley Financial provided $30 million of new tranche A last-out term loans and committed to provide $35 million of additional incremental last-out term loans through the maturity date. These incremental last-out term loans will amortize the revolving credit facility through reductions in revolving credit facility commitments over time. The proceeds from the last-out term loans are expected to be used to pay transaction fees and expenses, repay outstanding revolving credit facility borrowings, and to support working capital and general corporate purposes. In addition to the combined $65 million, B. Riley also committed to make an additional $5 million in last-out term loans available at the company’s request for working capital purposes.
B. Riley also provided a limited guaranty for all obligations under B&W’s revolving credit facility (other than letters of credit and certain other contingent obligations), including outstanding revolving credit loans and earned interest and fees. This guaranty will replace the refinancing backstop commitment previously provided by B. Riley.
Under the amended credit agreement, the current sublimit on borrowings under the revolving credit facility is maintained. In addition, the revolving credit facility continues to be available for existing and new letters of credit, subject to certain sublimits. Certain interest payments due to the senior lender syndicate will be deferred to 2021.
B&W also entered into an agreement with B. Riley to equitize approximately $16.2 million of fees and interest payments through Dec. 31 on the unpaid principal amount of the last-out term loans, including the new tranche A term loans. All stock issued in payment of these fees and interest will be valued at a price equal to the average volume weighted average price of the common stock over 15 consecutive trading days beginning on May 15, subject to customary adjustments and, to the extent required, stockholder approval under the rules of the New York Stock Exchange.
“The closing of this financing agreement during an unprecedented global crisis is a significant accomplishment,” Kenneth Young, CEO of B&W. “With our financial position strengthened and long-term availability to support multi-year projects, we are well-positioned to build on the momentum we have achieved over the last year. We appreciate the continued support of our lenders, customers, suppliers, employees and shareholders as we have worked through this process.
“The entire management team, along with our experienced and dedicated employees, recognizes the critical role we play to provide essential energy and environmental products and services. We are committed to continuing to execute our strategy to leverage our best-in-class core technologies, engineering and services for electric utility, power generation and industrial customers around the world, and to achieve sustained value for our shareholders.”
Headquartered in Akron, OH, B&W is a provider of energy and environmental technologies and services for the power and industrial markets.
