Lenders Amend Essar Algoma Term Loan Credit Facility
09/11/2009 - Lenders holding a majority of Essar Steel Algoma’s $315.7 million senior secured term loan credit facility approve a permanent amendment that will enable continued compliance and providing increased operating flexibility in the future.
Lenders holding a majority of Essar Steel Algoma Inc.’s $315.7 million senior secured term loan credit facility have approved a permanent amendment that will enable continued compliance with the facility and providing the company with increased operating flexibility in the future. Although Essar Steel Algoma has been compliant in its covenants to date, the company decided to seek relaxation of the facility’s terms in view of prevailing market conditions.
The amendment, which became effective September 9, 2009, waives compliance with maximum leverage and minimum interest coverage ratios for a four-quarter holiday period beginning September 2009 through the quarter ended June 30, 2010. Revised covenant levels are reinstated after the holiday period.
"This amendment is an endorsement from our lenders, demonstrating their confidence in the company's ability to effectively respond to these unprecedented market conditions,” said the company's CEO, Armando Plastino, commenting on the waiver. “It further acknowledges our continued commitment to our employees and the community of Sault Ste Marie through capital investments of nearly CDN $400 million since the acquisition.
“Currently, steel markets have strengthened both in terms of price and volume allowing us to recall laid-off employees,” added Plastino. “We are confident that this amendment now provides the company with the necessary flexibility and stability to continue to weather this market cycle with a view to long term sustainability."
