NFI Group, an independent bus and coach manufacturer and a provider of electric mass mobility solutions, provided an update on proposed amendments to its credit facilities, including relief from existing covenants, and the receipt of non-binding commitments for a financial support package of approximately $187 million from the Government of Manitoba and Export Development Canada (EDC), a financial Crown corporation.

Details include:

• NFI is working closely with its banking partners to finalize amendments to the company’s credit facilities, which includes the company’s existing senior revolving credit facility and its revolving UK credit facility that are anticipated to, among other things, provide flexibility with respect to key financial covenants (total leverage ratio, minimum Adjusted EBITDA and interest coverage ratio) for the fourth quarter of 2022 and the first two quarters of 2023.
• Under the proposed amendments, NFI would lower the revolver capacity from $1.25 billion to $1.0 billion, and the UK Facility from £50 million ($60.3 million) to £40 million ($48.3 million). The revolver currently has a $250 million minimum liquidity requirement, which would be reduced to $25 million.
• The amendments to the facilities are subject to approvals and documentation, which are expected to be completed by Jan. 1, 2023. Once completed, the company will provide additional details on the amended covenants and other terms.
• Non-binding commitment from the Government of Manitoba for a C$50 million ($37 million) debt facility to support investments in working capital and general corporate purposes.
• Non-binding commitment from EDC, Canada’s export credit agency, for a $50 million debt facility to support supply chain financing and an up to $100 million credit/guarantee facility for NFI’s surety and performance bonding requirements for new contracts.
• The debt facilities from the Government of Manitoba and EDC, and the guarantee facility have received credit approvals but are subject to documentation, certain conditions, and final approvals by EDC and the Government of Manitoba. NFI anticipates that the approvals and documentation can be completed early in 2023, at which point the support would be available.
• The debt facilities from the Government of Manitoba and EDC are on commercial terms, each having a one-year maturity that can be extended for an additional two years, subject to approval by the respective lenders.

NFI’s board of directors have made the decision to suspend the payment of dividends to comply with credit agreement requirements and in support of NFI’s focus on improving its liquidity and financial position.

The revolver matures on Aug. 2, 2024, and, under the proposed amendments, the UK facility would mature on June 30, 2023. NFI and its banking syndicate partners are focused on finalizing the amendment documents and, following their completion, NFI will begin work on developing new longer-term credit agreements. NFI will be seeking agreements that provide appropriate capacity and covenants matched to the company’s anticipated financial performance and recovery.

“The programs we announce today will be critically important in helping us achieve several key strategic objectives. They will strengthen our financial position, enhance our surety bonding capacity, increase liquidity and allow us to focus on execution and realization of record demand for our products and services,” Paul Soubry, president and CEO of NFI, said.

“On behalf of the NFI team, I want to thank the Government of Manitoba and EDC (a member of our banking syndicate and a long-time partner) for this tangible and critical display of support. We will now work on finalizing the remaining outstanding items with our partners, and I have confidence that we will achieve our common goals as we move beyond this extremely challenging period, initially caused by the COVID-19 pandemic then further impacted by global supply disruption.

“I must acknowledge the members of the NFI team and our union partners, who have been flexible, patient, and accommodating for much longer than any of us thought would be required. Since March 2020, we have had to eliminate over 2,000 positions globally, closed or rationalized numerous facilities, incurred significant financial losses, and dealt with ongoing waves of supply underperformance. It has only been through the dedication, persistence, and hard work of our people that we have been able to deliver highly customized buses and coaches, support vehicles in service, and significantly grow our backlog. The road ahead is bright, and the support provided by our people and our partners will assist us as we move towards a strong future recovery executing on our $5 billion backlog.”

“NFI is the largest bus manufacturer in North America with the most technologically advanced zero-emission buses in the industry,” Heather Stefanson, Premier of Manitoba, said.. “Like many other global vehicle manufacturers, NFI’s recent challenges reflect the impacts that unprecedented supply-chain disruptions have had on vehicle production. This repayable loan is a strategic investment to help capitalize on economic growth opportunities in manufacturing and to help maintain jobs as NFI recovers from global supply-chain disruption and benefits from record investments in public transit. I am especially excited to soon see NFI’s industry-leading electric buses get rolled out in Manitoba, helping drive our net-zero agenda forward.”

“Cities around the world from Los Angeles to London rely on NFI’s cutting-edge vehicles to safely and efficiently move millions of passengers every day,” Cliff Cullen, economic development, investment and trade minister of Manitoba, said. “NFI is also a key employer and industry leader in Manitoba with a history of success and growth that illustrates Manitoba’s burgeoning manufacturing industry. Our government is pleased to support NFI with this repayable loan, which not only helps grow our economy, but also keeps jobs here in our province.”