According to an 8K filed with the SEC, DBS Bank served as agent on an amendment to Startek’s senior term loan and revolving credit facility. As part of the amended and restated facility agreement, which was signed by one of its wholly owned subsidiaries, Startek agreed to accede to the facilities agreement as an additional guarantor.
The agreement continues to provide for a $140 million term loan facility along with a $20 million revolving credit facility. However, the amendments now provide Startek with a deferment of principal payments until February 2021, along with a potential increase of the revolving credit facility from $20 million to $27.5 million. The majority of financial covenants also have been waived for the remainder of the year, including covenants related to cash flow cover, interest cover and adjusted leverage ratio.
As previously announced, on June 29, Startek raised $7.5 million via private placement of common shares to an affiliate of Capital Square Partners, the company’s principal shareholder.
Between the amended debt agreement, increased revolving credit facility and recent equity raise, Startek expects to have more than $27 million of additional liquidity available over the rest of 2020.
“These amendments underscore our lenders’ confidence in our strategy and growth potential, as well as our improving business trends,” Aparup Sengupta, executive chairman and CEO of Startek, said. “We will continue to prioritize our employees’ health and safety during this difficult time, and the additional liquidity and flexibility from this new agreement will enable us to continue providing our customers with exceptional support as our various economies reopen across the globe. We will continue to diligently manage our operating cash flows and costs given the ongoing uncertainty surrounding the global economy.”
“We are very pleased with the execution of this restated and amended facility agreement and are thankful for the support from our lenders and shareholders,” Ramesh Kamath, CFO of Startek, said. “This transaction further strengthens Startek’s financial flexibility while providing us with the opportunity to capitalize on growth opportunities.”
Startek is a provider of technology-enabled business process outsourcing solutions.