Colabor Group announced that it entered into two agreements for the refinancing of its credit facilities, agreements that will provide the company with greater financial flexibility and an enhanced ability to manoeuvre in its business model.
First, a banking syndicate led by BMO Bank of Montreal granted a credit facility of a maximum amount of $140 million for a term of three years. This facility includes an accordion clause providing for a $30 million increase in the authorized amount, subject to certain conditions. The company was also granted term credit facilities totaling $18 million that may be used for specific purposes, repayable over a term of 24 months commencing at the time of their use.
Second, the company has entered into a loan agreement for a total capital amount of $42.5 million, of which $15 million will be used to repay a loan taken out in December 2011, and the balance will be employed as working capital.
To secure each of these credit facilities, the company, its subsidiaries and related entities have granted mortgages on the entirety of their assets in favor of each of these lending groups.
“This refinancing will allow Colabor to proactively pursue its initiatives to accelerate its growth and organizational development. We believe the new credit agreements will improve our flexibility in current operations at no additional cost to the Corporation,” said Claude Gariépy, president and CEO of Colabor.
The company expects to incur additional financial expenses of approximately $1 million in the fourth quarter of 2013. These additional expenses are attributable to the writeoff of expenses related to the company’s former credit agreement and also include an amount paid as interest on the balance of the sale price related to the acquisition of Bertrand, following a Superior Court decision. This decision will also entail a non-material correction of the Corporation’s financial expenses and overall results for fiscal years 2009 through 2012 in connection with an accounting error.
Colabor is a wholesaler and distributor of food and non-food products serving the foodservice and retail markets in Quebec, Ontario and the Atlantic provinces.