Quantum completed a $210 million refinance of its current debt facilities, consisting of a new $165 million senior secured term loan facility and a $45 million revolving credit facility.
According to the related 8-K filing, U.S. Bank served as disbursing and collateral agent on the term loan while PNC Bank acted as administrative agent on the revolver.
The new loan facility will be used to repay the company’s outstanding debt and related fees and interest (totaling $124.6 million with respect to its current term loan and $21.2 million with respect to its current revolving credit facility), provide capital to fund ongoing growth initiatives, and to support other general corporate purposes.
Quantum’s current cash and cash equivalents are approximately $14 million, and the amount drawn down under the new revolving credit facility is $4.4 million.
“This financing is a major milestone for Quantum and validates our credit worthiness and business model outlook,” said Jamie Lerner, Quantum chairman and CEO. “This facility, along with our other financial resources, positions us to execute our growth strategy. We look forward to re-engaging with the investment community once we resolve the inherited challenges related to our previously announced restatement.”
Key terms of the loans also included:
- $150 million will be drawn from the term loan at closing, with $15 million funded (without contingencies) on or before January 11, 2019
- A five-year maturity from the closing date
- Interest rates at LIBOR plus 1000 basis points per annum, payable monthly in cash, calculated on an actual/360-day basis, with a LIBOR floor equal to 2.0%
- Warrants issued to the lenders to purchase an aggregate of 7,110,616 shares (subject to customary anti-dilution adjustments) of the company’s common, with an exercise price of $1.33 per share
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Quantum stores and manages video content for businesses in post-production, broadcast, corporate video, sports video, autonomous vehicle design, the defense department and cloud services, among others.
