Control technologies (NEO: KNR) secured credit from a Schedule 1 bank to repay certain debentures due in October. The financing would consist of senior secured credit facilities of up to $50 million.
The facilities include a term loan facility of up to $20 million, as well as a revolving credit facility of up to $10 million and an accordion of up to $20 million. The revolver would be based on base borrowing requirements, which are based on qualifying receivables. The debt is expected to bear interest monthly at prime rate plus a margin of between 1.25% and 2.00%, with repayments of 1.25% of the total loan payable quarterly.
Kontrol said the funds are marked for use to settle its outstanding line of credit, as well as to refinance debentures maturing in October. The revolver should be used for working capital while the accordion should be used for mergers and acquisitions.
The company currently expects to initially draw $6.0 million from the term loan. Among the companies’ most recently announced financings, Kontrol had an exceptional operating margin of $4.9 million, compared to a cash position of just $1.3 million. Meanwhile, that drawdown on the term loan will likely double in October, when the company will have about $5.7 million in maturing unsecured debentures.
Kontrol Technologies last traded at $1.25 on the Neo.
Information for this briefing was found via Sedar and the companies mentioned. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.
As founder of The deep dive, Jay focuses on all aspects of the business. This includes operations, as well as serving as lead writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay writes freelance for a number of companies and has been published on Stockhouse.com and Canna Investor Magazine among others.