Vintage Wine Estates, a wine producer in the U.S. with a direct-to-consumer platform, amended its credit agreement to, among other things, waive existing events of default, redefine financial covenants and allow for additional asset sales.
BMO Bank acts as administrative agent under the amended credit agreement.
“We are pleased our lenders have worked with us to execute a credit agreement that we believe provides us financial and operational flexibility to continue to execute on our Five-Point Plan,” Kristina L. Johnston, chief financial officer of VWE, said. “We are becoming a more efficient and productive wine company with stronger cash generation from operations. We are simplifying the business, improving inventory management and quality while focusing sales and marketing on our key brands. We also look forward to advancing our strategy under new leadership with Seth Kaufman assuming the role of CEO on October 30, 2023.”
As of closing, the company had approximately $305 million in outstanding borrowings under the amended credit agreement and approximate total liquidity of approximately $73 million including approximately $18 million of cash.
In exchange for the waiver of defaults and financial covenant modifications, the amended credit agreement, among other things, reduces the aggregate revolving commitment and the aggregate delayed draw term loan commitment to $200 million and $38.1 million respectively, requires term loan prepayments of $10 million by March 31, 2024, an additional $10 million by June 30, 2024 and an additional $25 million by Dec. 31, 2024. In addition, the company will be required to make prepayments with any cash on hand in excess of $20 million and suspends the exercise of any incremental facilities through December 31, 2024. The rates under the amended credit agreement are initially SOFR plus 3%.
