TORONTO--SunOpta Inc. ("SunOpta") (Nasdaq:STKL) (TSX:SOY), a leading global company focused on organic, non-genetically modified and specialty foods, announced today that it has entered into a new five-year credit agreement for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $350 million, subject to borrowing base capacity. This new global credit facility replaces SunOpta's previous North American credit facilities, comprised of a US$165 million facility and a CAD$10 million facility, that were set to expire January 27, 2017, and its €92.5 million multipurpose European credit facilities that were due on demand with no set maturity date. The new expanded credit facility will be used to support the working capital and general corporate needs of SunOpta’s global operations, in addition to funding future strategic initiatives. In addition, subject to meeting certain conditions, SunOpta may request to increase the total lending commitments under the new facility to a maximum aggregate principal amount not to exceed $450 million.
“We are extremely pleased to complete this financing with our lenders as we further solidify our capital structure across our integrated global operations,” said Rob McKeracher, Chief Financial Officer of SunOpta. “By consolidating the North American and European standalone facilities that have served our foods business for the past seven years, we will benefit from enhanced flexibility allowing us to continue to execute on our core strategy of maximizing our field to table, ‘two-touch’, business model while supporting the global growth of our business.”
Borrowings under the new credit facility will bear interest based on various reference rates including LIBOR plus an applicable margin. The applicable margin in the new facility ranges from 1.25% to 1.75% for loans bearing interest based on LIBOR, compared to a range of 1.75% to 2.50% under the previous credit facility in North America. The applicable margin is set quarterly based on average borrowing availability and will be initially set at 1.50% for loans bearing interest based on LIBOR. The obligations of the borrowers under the facility are guaranteed by substantially all of SunOpta’s subsidiaries and, subject to certain exceptions, such obligations are secured by first priority liens on substantially all assets of SunOpta and the other borrowers and guarantors. The credit facility also provides management the ability to pay down second lien debt, subject to customary covenants and borrowing availability requirements.
The facility is provided by a syndicate of banks, including Bank of America, N.A., Rabobank Nederland, Canadian Branch, Bank of Montreal, JP Morgan Chase Bank, N.A., and Wells Fargo Bank, National Association.
About SunOpta Inc.
SunOpta Inc. is a leading global company focused on organic, non-genetically modified ("non-GMO") and specialty foods. The Company specializes in the sourcing, processing and packaging of organic and non-GMO food products, integrated from seed through packaged products; with a focus on strategic vertically integrated business models. The Company's organic and non-GMO food operations revolve around value-added grain, seed, fruit and vegetable based product offerings, supported by a global sourcing and supply infrastructure. The Company also holds an approximate 66% ownership position in Opta Minerals Inc. (TSX:OPM), a producer, distributor, and recycler of industrial minerals and silica-free abrasives. Opta Minerals is a non-core holding.
Certain statements included in this press release may be considered "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. These forward-looking statements include, but are not limited to, the proposed use of funds under the new credit facility and the expected benefits of the enhanced flexibility under the new credit facility. Terms and phrases such as “will,” “may,” “expects,” “intends,” “continue” and other similar terms and phrases are intended to identify these forward looking statements. Forward looking statements are based on information available to us on the date of this release and are based on estimates and assumptions made by the Company in light of our experience and perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions. Whether actual timing and results will agree with expectations and predications of the Company is subject to many risks and uncertainties including adverse fluctuations in applicable interest rates, the risk of potential covenant breaches under the credit facility and other factors that might limit or affect the expected benefits of improved borrowing rates and increased availability of funds, as well as other risks described from time to time under "Risk Factors" in our Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q (available at www.sec.gov). Consequently all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments that we anticipate will be realized.