Diamond Estates Wines & Spirits entered into a Second Amended and Restated Credit Agreement (“SARCA”) with Bank of Montreal (“BMO”). The SARCA folds in the previous BMO facility of the Equity Wine Group and its subsidiaries (collectively “EWG”) with the Company’s existing BMO credit facility. EWG was acquired by the Company on October 6, 2021, and a condition of the transaction was for the Company to consolidate all its facilities with BMO.
“We are very pleased with our relationship with BMO and the support that the BMO team has given us,” stated Murray Souter, President & CEO. “Executing this agreement extends our banking relationship with BMO into 2024 and helps support our business plans and future growth.”
The terms of the SARCA were updated, and the notable terms are as follows:
Credit Limit. The revolving term of $14.4 million with an accordion feature to fund future growth and non-revolving term facility of $10.8 million.
Maturity Date. The revolving and non-revolving facilities have a two-year term expiring as at Jan 2, 2024. The Business Credit Availability Program Facility expires on October 1, 2022 unless extended by the Lender in its sole and absolute discretion at the request of the Borrower for a further period provided that such extension shall not in any case extend beyond October 26, 2025.
Interest Rate. The interest rate on each of the facilities is as follows:
- prime plus 1.40% under the revolving term facility;
- prime plus 1.65% under the non-revolving term facility; and
- prime plus 1.65% under the BCAP Facility.
Affirmative Covenants. The SARCA is subject to the following major covenants:
- the Leverage Ratio at less than or equal to 2.15 to 1; and
- the Fixed Charges Coverage Ratio at greater than or equal to 1.25 to 1.