According to an 8K filed with the SEC, JPMorgan Chase Bank served as administrative agent on an amendment to Welbilt’s $400 million senior secured revolving credit facility. The amendment was made to address the risk of non-compliance with the revolver’s financial covenants due to the COVID-19 pandemic’s impact on the commercial foodservice industry and the resulting demand for Welbilt products.
Highlights of key terms of the revolver amendment include:
- The leverage ratio and interest coverage financial covenants are suspended for four quarters beginning with the quarter ending June 30, 2020 and replaced during that period with minimum consolidated EBITDA, minimum liquidity and maximum capital expenditures tests, with the minimum liquidity test extending one additional quarter.
- The leverage ratio and interest coverage tests will be reinstated in Q2/21 at modified levels compared with the pre-amendment requirements, and return to the pre-amendment covenant levels by Q4/21.
- The size ($400 million) and maturity (October 2023) were unchanged.
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“We are pleased to have completed the revolver amendment early in the second quarter,” Marty Agard, executive vice president and CFO of Welbilt, said. “Welbilt was on a journey to reduce its debt-to-EBITDA ratio to between 3.25x and 3.75x by the end of 2021, which has been negatively impacted by the COVID-19 pandemic. This amendment provides substantial covenant headroom over seven quarters, which will help to ensure continued access to our revolver throughout this crisis and recovery period. We continue to believe that our liquidity resources including this revolver are sufficient to meet our working capital needs and cash requirements and, as such, we did not seek additional revolver capacity in this amendment. We remain committed to continuing our deleveraging journey once this crisis abates and business conditions begin to normalize.”
Welbilt is a provider of kitchen equipment through brands such as Cleveland, Convotherm, Crem, Delfield, Frymaster, Garland, Kolpak, Lincoln, Manitowoc Ice, Merco, Merrychef and Multiplex.
