HSBC Bank provided an up to $17 million new acquisition and operating banking credit facility to Covalon Technologies. Export Development Canada partnered with HSBC to provide partial guarantees under the facility.
The agreement includes a C$9 million ($6.872 million) acquisition demand line, a C$5 million ($3.818 million) revolving operating facility and a $2 million bank guarantee facility. HSBC will also provide a foreign currency hedging facility and corporate credit card facility in support of Covalon’s ongoing operations.
The term of the acquisition demand line is repayable over five years.
Brian Pedlar, CEO of Covalon, said, “The HSBC credit facility will allow Covalon to fund its acquisitions plans, which are proceeding well, in addition to its inventory and working capital needs as the company grows. For Covalon to have earned the trust of such a major international bank like HSBC is quite an achievement, especially given the large amount of the facility. This agreement is in the best interests of shareholders as it provides growth capital to Covalon without the need for the dilution resulting from the issuance of shares.”
Covalon Technologies researches, develops and commercializes new healthcare technologies that prevent, detect and manage medical conditions in specialty areas such as wound care, tissue repair, infection control, disease management, medical device coatings and biocompatibility.