Business
Zedcor Inc. Announces New Term Loan and Equipment Financing
Calgary, Alberta--(Newsfile Corp. - October 18, 2021) - Zedcor Inc. (TSXV: ZDC) (the " Company...
About this update from Zedcor Inc
[{"type":"text","content":"Zedcor Inc. Announces New Term Loan and Equipment FinancingCalgary, Alberta--(Newsfile Corp. - October 18, 2021) - Zedcor Inc. (TSXV: ZDC) (the \"Company\" or \"Zedcor\") is pleased to announce that, after discussing alternative competitive financing offers, the Company has entered into a new financing agreement with an Alberta based credit union that offered terms and conditions that most suited the Company's current needs and future growth plans. The agreement consists of:1) A $6.1 million term loan that is fully committed for five years. The term loan bears interest at 5.15% and will have monthly blended principal and interest payments of $115,534. $4.4 million of the proceeds of the term loan will be used to repay the Company's outstanding term loan which matures on January 1, 2023. The remaining amount will be used to repay indebtedness that was obtained to finance growth of the Company's security business and MobileyeZ security tower fleet.2) A $3.0 million revolving equipment financing facility which will be used to fund the Company's 2022 capital program. Zedcor is able to draw on this facility at any time for up to 75% of new equipment purchases. The equipment financing draws bear interest at Prime + 2.0% and each draw will be amortized over 5 years with blended principal and interest payments.3) An authorized overdraft facility up to $3.0 million, secured by the Company's accounts receivable, up to 75%, less priority payables. The overdraft facility is due on demand and any outstanding overdraft bears interest at Prime + 1.5%.The new financing agreement is secured with a first charge over the Company's current and after acquired equipment, a general security agreement, a subordination and postponement agreement with a director of the Company with respect to a note payable, and other standard non-financial security. The agreement has the following annual financial covenant requirements:For the fiscal year end December 31, 2021, a modified debt servicing covenant of 1.25 to 1.00. The modification relates to the amount of debt payments for 2021 being assumed as $2.2 million.For the fiscal year ends December 31, 2022 and onwards, a debt servicing covenant of 1.25 to 1.00 and a funded debt to EBITDA covenant of 3.00 to 1.00.The expanded credit facility, as well as the covenant flexibility for the 2021 fiscal year end allow ...