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Bri-Chem closes $6.25-million term loan with CIBC

2020-07-17 11:54 ET - News Release

Mr. Jason Theiss reports

BRI-CHEM ANNOUNCES CLOSING OF $6.25M BCAP TERM LOAN AND EXTENSION OF SENIOR CREDIT FACILITY

Bri-Chem Corp. has closed a $6.25-million term loan with Canadian Imperial Bank of Commerce (CIBC) under the Canadian Government Business Credit Availability Program (BCAP). The company has reached an agreement with CIBC to extend the term of its asset-based lending facility to Oct. 31, 2021. The Company and Greypoint Capital Inc. have also agreed to certain amendments and additional terms to the Company's current subordinated term loan with Greypoint in the aggregate principal amount of $7,866,667.

ABL Facility and Sub Debt Loan

Bri-Chems' senior secured ABL Facility, which was scheduled to mature on Oct. 31, 2020, has been extended through to October 31, 2021. The Company and CIBC have agreed to amend certain conditions and covenants of the ABL Facility as of the date hereof.

In addition, the Company and Greypoint have agreed to certain amendments to the Sub Debt Loan, including but not limited to a 2-per-cent payment-in-kind (PIK) interest on the Sub Debt Loan until loan maturity, the amendment of certain financial covenants and the issuance of 2,500,000 Bri-Chem warrants to Greypoint. The Warrants are exercisable into common shares of Bri-Chem at a price of $0.10 per share for a period of 4 years from the date of issuance.

$6.25 million term loan under the Canadian Government Business Credit Availability Program

The BCAP Loan, which is administered by CIBC, is backed by the Canadian Government under the BCAP. Pursuant to the program, 80% of the principal of the BCAP Loan is guaranteed by The Business Development Bank of Canada. The BCAP Loan bears interest at a rate of 2.25% above CIBC's prime lending rate. The term of the BCAP Loan is 10 years and is interest only for the first 12 months. Under the terms of BCAP, the proceeds of the BCAP Loan must be used to finance operations and can be used to make normally scheduled interest and principal payments, as well as ordinary-course debt payments. Proceeds from the BCAP Loan cannot be used to refinance existing debt.

About Bri-Chem Corp.

Bri-Chem has established itself, through a combination of strategic acquisitions and organic growth, as the North American industry leader for wholesale distribution and blending of oilfield drilling, completion, stimulation and production chemical fluids. We sell, blend, package and distribute a full range of drilling fluid products from 26 strategically located warehouses throughout Canada and the United States.

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