Unique Fabricating amends forbearance agreement to reinstate swingline

By Sarah Lizee

Olympia, Wash., June 2 – Unique Fabricating, Inc. and subsidiaries Unique Fabricating NA, Inc. and Unique-Intasco Canada, Inc. entered into a first amendment to a forbearance agreement dated May 22 relating to its credit agreement, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The amendment reinstated the swingline commitments and the obligations of the swingline lender to make advances.

Unique Fabricating announced on May 23 that it had entered into an “accommodation agreement” with three of its main customers and its lenders, as well as the forbearance agreement with the lending group.

The customers agreed to provide financial and other accommodations to Unique Fabricating and the lending group to support ongoing operations and a sale or restructuring process by the company.

The accommodation agreement will continue through Oct. 31, unless before that date the company is sold to a qualified buyer, or the term ends due to the occurrence of an event of default.

The accommodation agreement required that Unique Fabricating immediately start a process for the sale of its business to a qualified buyer, in line with fixed milestones, which contemplates completion of the sale process by no later than Oct. 31.

The agreement also requires that Unique Fabricating deliver to each customer and agent for the lending group a restructuring plan within 30 days, appoint a chief restructuring consultant and engage an investment banker.

The accommodation agreement provides for specified price increases to be paid by the customers or, alternatively, funding by the customers through the purchase of a junior tranche of debt to be established under the company’s existing credit agreement of up to $15 million in total.

The agreement further required that, within five business days of its execution, Unique Fabricating would obtain commitments from its seven largest customers not initially participating in the accommodation agreement to agree to economic benefits equal to or greater to those arising under the accommodation agreement, as well as agreements from the remainder of Unique Fabricating’s customers to provide economic benefits to support its business during the term.

The lending group agreed to forbear from exercising its rights to collect payment of the debt until Oct. 31, subject to earlier termination in some events.

The forbearance agreement is conditioned on, among other things, payment to the lenders by the company of the principal reduction payment that was due March 31 in the amount of $1.23 million, plus interest that is overdue, and attorney and adviser fees of the lending group.

The forbearance agreement provides that during the forbearance period, the agent and lenders will accept 50% of the quarterly amortizing loan payments due on June 30 and Sept. 30, to be paid in monthly installments.

The balance of the quarterly payments is deferred until the earlier of a forbearance termination event, the maturity date of the loans or repayment of the loans.

The Auburn Hills, Mich., company makes foam, rubber and plastic components.

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