Celadon has signed a term sheet for a new $225 million asset-based revolving credit facility led by Bank of America that is expected to close during the June quarter and an amendment to its existing credit facility to waive potential defaults and provide interim liquidity.

Chairman and CEO Paul Will commented, “Our new credit facility, as well as the amendments to our existing facility, will give us the liquidity we need to operate our business assuming we execute against our plan. While management remains focused on running the business, I am confident the independent audit committee will proceed quickly and thoroughly to investigate the transactions and develop a plan for re-issuing the affected financial statements. We will continue to deliver value to our thousands of customers, employees, investors and other business partners every day. We deeply appreciate their support as we move toward the busy summer season.”

The proposed ABL facility will be used to refinance the company’s existing credit facility and support the company’s ongoing working capital and general corporate needs. Availability under the facility will be based on a borrowing base including accounts receivable, equipment, inventory and real estate at customary advance rates. The expected closing date is on or about June 30, 2017, subject to customary closing conditions including negotiation and execution of definitive agreements, due diligence and requisite approvals.

The company also entered into an amendment of its primary credit agreement which waived certain defaults related to the March 2017 quarter financial covenants and as a result of the withdrawn financial statements, established a new $200 million borrowing limit and set in motion the perfection of assets, including those that would accompany the proposed new asset-based credit facility. Other amendments included higher interest rates, revised asset coverage ratio covenant of 0.90 to 1.00 for periods prior to June 30, 2017, supplemental financial reporting obligations and borrowing conditions, prohibition on future dividends or stock buybacks and a capital expenditure limitation.

Concurrently, Jonathan Russell has been named president and COO of Celadon Group. Russell has been the president of Celadon Logistics, which includes the company’s asset light business units, since November 2010 and served in various other roles since 2002.