Alto Ingredients, a producer and distributor of specialty alcohols and essential ingredients, entered into a $125 million senior secured term loan facility with certain funds managed by Orion Infrastructure Capital (OIC). The term loan allows for periodic draws in an aggregate amount up to $100 million, with an additional $25 million available subject to satisfying certain conditions. The term loan matures in six years and is not subject to scheduled amortization payments. The term loan has a fixed annual interest rate of 10.0% with an original issue discount of 1.5%. In connection with entering into the term loan, Alto will issue up to 1.6 million shares of common stock to OIC.
“The term loan gives us the capital we need to upgrade our plants to produce higher value products with better margins,” Bryon McGregor, CFO of Alto Ingredients said. “The facility is also structured to give us tremendous flexibility – we can draw the capital over time, when we need it, and there are no financial covenants. Our near-term plans for the capital include expanding corn oil production, corn storage and specialty alcohol production. We also plan to pursue various protein and yeast production expansion options, energy supply improvements and carbon capture sequestration opportunities.”
“We are excited to partner with Alto and help accelerate their strategic transformation by financing capital expenditures to enhance production of high-value, high-margin and more sustainable products,” Ethan Shoemaker, investment partner and head of infra credit at OIC, said. “This partnership supports OIC’s goal to champion the reinvention of sustainable infrastructure through investment partnerships. We are excited to be both a lender and a shareholder of Alto and look forward to supporting management as they execute the next phase of their transformation.”
Guggenheim Securities acted as lead placement agent and lead arranger and RBC Capital Markets acted as arranger for the senior secured term loan facility.