Investissement Québec closed a C$10 million ($7.35 million) subordinated secured term loan for Birks Group.

Birks will use the new term loan to support the working capital needs of the company following the impacts of COVID-19. The facility increases the company’s borrowing capacity, allowing it to continue the relaunch of its operations, including the full re-pening of its store network throughout Canada, and omnichannel initiatives in the COVID-19 environment.

The new term loan, which matures in July 2024, is subordinated to the company’s existing senior secured revolver facility with Wells Fargo Capital Finance Canada and Crystal Financial. The loan bears an interest rate of 3.14% per annum, is repayable in 36 equal payments beginning in July 2021 and requires the company to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01, calculated on an annual basis.

“We are pleased to announce this financing with Investissement Québec, a long-time partner of the company,” Jean-Christophe Bédos, president and CEO of Birks Group, said. “The closing of this deal at favorable terms to the company is reflective of our strong partnership with IQ. It will provide us with increased financial flexibility needed to accomplish our long term strategic objectives. We appreciate the support of IQ and look forward to working closely with their team as we continue to align the company towards long-term value creation.”

Birks Group is a designer of jewelry, timepieces and gifts and operator of jewelry stores in Canada.