Business
Refinancing and Expansion of Credit Facilities
Refinancing and Expansion of Credit Facilities.
About this update from Water Intelligence Plc
[{"type":"text","content":"\n\n \n\n \nRefinancing and Expansion of Credit Facilities for Growth Plan; Shareholder Meeting\nWater Intelligence plc (AIM: WATR.L) (\"Water Intelligence\" or \"Group\"), a leading multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable water is pleased to announce the refinancing of its existing debt (\"Refinancing\") and expansion of its credit facilities (\"Expansion\") with M&T Bank, a leading US bank. The transaction provides the Group with additional non-dilutive resources and significantly increases the Group's capacity to execute its strategic growth plan.\nKey terms of the Refinancing and Expansion of Credit Facilities\nThe Refinancing spreads the amortization of approximately $21 million of total liabilities (bank debt and deferred payments from franchise acquisitions) through 2029 at a fixed rate of 6.35%. The debt service for the next five years requires between 5 and 10% of principal to be repaid each year freeing additional cash for available accretive growth opportunities. The Refinancing prudently leverages the Group's current strong balance sheet and track record of growing cash from operations to put it in a position to be opportunistic.\nMoreover, as part of the Refinancing, M&T Bank and the Group have agreed on an Expansion of its credit capacity with a $3 million acquisition line of credit with a floating market rate capped at 8% and a $2 million working capital line of credit at a floating market rate. Following the Refinancing and Expansion, the Group will have more than $20 million in resources from which to execute its growth strategy for any of the four layers of its capital allocation plan discussed below.\nStrategic Rationale for Refinancing\nIn the Chairman's Statement as part of the Group's recently released Annual Report, Water Intelligence reaffirmed its \"Build and Buy\" growth plan for its water infrastructure services platform and the decision-making principles that underpin the Group's approach to capital allocation.\nThe Chairman's Statement identifies four groups of investments that would form a \"layer cake\" of growth. The foundational two layers focus on investments to feed organic growth: both organic growth from the Group's current water leak detection and repair offerings and organ...