Horizon Global Corp. has closed a new financing agreement to provide additional liquidity and has amended its existing term debt agreement to relax financial covenants. As a result, the manufacturer of branded towing and trailering equipment will be able to reduce leverage and extend the maturity of its debt structure while it pursues operational improvements under its “Americas Action Plan.”
Horizon Global President and CEO Carl Bizon said in a statement, “This additional financing will help support our focus on providing the best possible service to our North American customers, while also supporting our execution against a number of business improvement initiatives in the Europe-Africa segment, including streamlining logistics, realigning management and optimizing the performance of our manufacturing facilities in the region.”
Here are some other notable details of the agreement.
- The $51 million new second lien term loan provides for incremental liquidity and payment of fees.
- Among the amendments to the existing first lien term loan is a call to reduce the loan by $100 million over the course of the next 12 months through asset sales, a junior capital raise, or a combination of both.
- The new second lien term loan would provide lenders warrants to purchase 6.25 million shares of the company’s common stock at $1.50 per share.
- As part of the second lien term loan agreement, Horizon Global agreed to appoint four new members to its board of directors, with the new directors constituting a majority of the board.
Horizon Global intends to use a substantial portion of the proceeds from the incremental borrowings to meet its customers’ needs for its 2019 summer selling season and provide additional operating flexibility.
