News

Spark Power Provides Corporate Update

Written by ABC AUDIO on October 31, 2022

IN ADVANCED NEGOTIATIONS WITH ITS SENIOR LENDER TO AMEND ITS CREDIT FACILITY

OAKVILLE, ON / ACCESSWIRE / October 31, 2022 / Spark Power Group Inc. (‘Spark Power’ or the ‘Company’) (TSX:SPG) is pleased to provide the following corporate update.

Financial

The Company continues to execute its plans to improve margin realization and reset its cost structure. The work to accelerate the integration of the business is largely complete and the positive momentum and performance gains realized in the second quarter are expected to continue through the third quarter and for the balance of the year.

‘While we continue to navigate the ongoing market challenges, I am pleased with the internal focus across our organization on the performance improvement initiatives and the #onespark integration’, said Richard Jackson, President & CEO of Spark Power. ‘As a result of the team’s hard work and laser focus, we are seeing a better revenue mix and improved margin performance. We are closing in on achieving our integration plan resulting in significant reductions in SG&A costs and readying the platform for the execution of our new growth plan that is in the final stages of launch’, added Jackson.

Capital

The Company is pleased to announce today that it is in advanced negotiations with its senior lender, Bank of Montreal (‘BMO’), on the terms of an amended and restated credit facility (the ‘Amended Credit Facility’). It is anticipated that the Amended Credit Facility will include a path to Spark Power reverting to traditional financial covenants at the end of Q1 2023, and additionally the Amended Credit Facility is expected to include the following material terms:

Maturity Date extended to September 30, 2024
Term Loan amortization period extended, and quarterly principal payments reduced to $1,125,000 effective for the Q4 2022 principal repayment due January 3, 2023
Reestablishing traditional financial covenants, Senior Debt to EBITDA Ratio, minimum Fixed Coverage Ratio and Total Debt to EBITDA ratio
Decreased interest rate margin on facility advances on adoption of traditional financial covenants
Application of the proceeds of the Bullfrog sale to the Term Debt and Operating Facility

Richard Perri, Executive Vice President & Chief Financial Officer of Spark Power, stated, ‘We are pleased to continue to work with BMO on this amendment to our lending agreement. As Spark Power remains on track with its recovery from the effects of the pandemic and rising costs of inflation that impacted the Company in 2021 and early 2022, this amendment will provide us with additional liquidity and operating flexibility to meet the needs of the business in its next stage of growth and maturity. BMO continues to be an ardent supporter and great partner to Spark Power, and we appreciate their unwavering support throughout this challenging period.’