Celadon Group will refinance its existing credit agreement with a new $100 million asset-based revolving credit facility, a new $200 million term loan and equity issuance and the extension of certain tractor lease maturities. Bank of America Business Capital (BABC) and Wells Fargo Capital Finance (WFCF) will provide the revolver, while the term loan and equity issuance will be provided by an investment firm.
The revolver will be used to provide ongoing working capital and general corporate liquidity, and the term loan will retire existing credit facility borrowings. The lender on the term loan also will receive 19.5% of fully diluted common stock and have the option of appointing up to two members of the company’s board of directors.
CEO Paul Svindland stated, “We have been engaged with the lenders under the prospective facilities for several months, and we believe they thoroughly understand our business, our near-term hurdles and our long-term opportunities. We appreciate their partnership and are confident that they will work diligently with us with a goal of closing the transaction by the end of our June quarter.”
To expedite the refinancing, Celadon amended its credit agreement, which, among other things, extended the existing financial covenant relief through June 15, 2018 and reduced the maximum borrowing amount to $189 million and the maximum outstanding amount to $214 million
Celadon Group provides long haul, regional, local, dedicated, intermodal, temperature-protect and expedited freight service across the U.S., Canada and Mexico.