Maxim Power and certain of its subsidiaries entered into a credit agreement with ATB Financial for a 35 month term that provides for senior debt financing of up to $44 million to support financing requirements of MAXIM’s 204 MW (M2) power plant located near Grande Cache, AB plus a cash collateralized letter of credit facility of $8 million to replace MAXIM’s current outstanding letters of credit for equal amounts.
Financing for M2 is provided under three credit facilities. The corporation is able to borrow up to $30 million under a construction loan that has a term of thirty-five months with an amortization requirement of ten years commencing when construction of M2 is complete. The corporation is also able to borrow up to $10 million under a revolving credit facility for the construction of M2. Upon completion of construction of M2, this revolving facility will become available for general corporate purposes, and the corporation will be able to access a second revolving credit facility to finance certain short-term working capital requirements up to $4 million.
MAXIM had entered into a $75 million revolving, one-year convertible loan on September 10, 2019 to finance the full construction of M2. In connection with the ATB credit agreement, the lenders under the convertible loan have agreed to subordinate the security granted under the convertible loan to the security granted to ATB under the ATB credit agreement. Currently, approximately $41 million is outstanding under the convertible loan. MAXIM anticipates repaying approximately $20 million owing under the convertible loan by December 31, 2019 by drawing on the ATB credit agreement. Repayment of the convertible loan principal will not otherwise be permitted during the initial 35 month term of the ATB loan unless there is undrawn capacity under the ATB credit agreement upon substantial completion of M2.
Based in Calgary, MAXIM is an Alberta-focused independent power producer which currently owns and operates a 150 MW power plant near Grande Cache, AB.
