TPIC - TPI Composites Inc. Announces Refinancing Transaction with Oaktree Significantly Strengthening Company's Liquidity Position and Enhancing Financial Flexibility | Benzinga
Improves liquidity by approximately $190 million
Permanently reduces future obligations by up to $90 million
SCOTTSDALE, Ariz., Dec. 14, 2023 (GLOBE NEWSWIRE) -- TPI Composites, Inc. (NASDAQ:TPIC) ("TPI" or "the Company") announced today that it has entered into a binding agreement (the "Agreement") with funds managed by Oaktree Capital Management, L.P. ("Oaktree") to refinance Oaktree's outstanding Series A Preferred Stock holdings in the Company. The refinancing closed concurrently with the execution of the Agreement.
Under the terms of the Agreement, Oaktree converted its existing $436 million Series A Preferred Stock investment into a $393 million senior secured term loan, with the remaining $43 million exchanged into common equity pursuant to a separate purchase agreement. Including Oaktree's existing common equity position in TPI, Oaktree holds 9.9% of TPI's common equity on a pro forma basis. In connection with this refinancing, the maturity of the term loan was extended to March 31, 2027, from November 22, 2026, the optional redemption date for the Series A Preferred Stock.
Under the terms of the term loan, the Company has the ability to pay in kind all interest payments through December 31, 2025, and 50% of the interest payments from January 1, 2026, through maturity. If the Company elects to pay in cash any interest payments that could have been paid in kind, the applicable interest rate will be reduced by 2%, resulting in an effective interest rate of 9% for such portion of interest. Importantly, TPI and Oaktree have also agreed that the term loan will not be subject to the minimum fixed charge dividend coverage ratio or other financial maintenance covenants that were previously in effect, other than the requirement to maintain a minimum cash balance in the U.S.
The refinancing transaction is expected to ...