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MDU amends terms of $20 million revolving credit facility, boosting it to $30 million
By Devika Patel
Knoxville, Tenn., July 3 - MDU Communications International, Inc. and its subsidiary, MDU Communications (USA) Inc., amended their agreement with FCC, LLC, d/b/a First Capital and Full Circle Funding, LP (the lenders) or a senior secured $10 million increase to its $20 million revolving five year credit facility, according to an 8-K filed Thursday with the Securities and Exchange Commission.
The filing said that, on June 30, the lenders agreed to loan the company up to $30 million (an additional $10 million beyond the previous $20 million) through a revolving credit facility.
The credit facility has a term of five years with interest payable monthly only on the outstanding principle. It is divided into six $5 million increments, with the interest rate per increment for the first four increments declining as principle is drawn from each increment.
The first $5 million increment carries an interest rate of Prime plus 4.1%, the second $5 million at Prime plus 3%, the third $5 million at Prime plus 2% and, the fourth $5 million at Prime plus 1%.
The new additional $10 million is divided into two $5 million increments, with the interest rate on these increments being Prime plus 1% to 4%, depending on the company's ratio of EBITDA to the total outstanding loan balance.
The company is under no obligation to draw any of the new increments.
The credit facility is secured by the company's assets.
The credit facility can be prepaid with 30 days' notice to lenders and a penalty of 0% to 2% of the outstanding principal balance, depending on the prepayment timing.
In connection with the new agreement and credit facility, the lenders received a five-year warrant for 375,000 common shares, exercisable at $0.60, and a five-year warrant for 375,000 common shares, also exercisable at $0.60.
Proceeds will be used for the continued growth and build out of the company's subscriber base.
MDU is a Totowa, N.J.-based digital satellite provider for multi-dwelling units.
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