- Diamond Estates Wines and Spirits (DWS) has amended its credit facilities agreement with the Bank of Montreal
- The original agreement provides Diamond Estates and its subsidiaries with a total of C$23 million
- The amendment provides an extension on debt maturity, fixed charge coverage ratio relief, and principal payment deferrals
- In return for the amendment, the company has issued 750,000 bonus warrants to Bank of Montreal
- Diamond Estates Wines and Spirits (DWS) remains unchanged and is currently trading at 16 cents per share
Diamond Estates Wines and Spirits (DWS) has amended its credit facilities agreement with the Bank of Montreal.
The winemaking company and its lender first entered the credit facilities agreement on September 29, 2017.
Under the original agreement, Bank of Montreal provides Diamond Estates and its subsidiaries with up to C$23 million in total. This consists of a $13 million revolving credit facility, and a $10 million non-revolving term loan.
This new amendment makes some changes to the agreement, mostly consisting of debt extensions, payment deferrals, and other financial relief. In particular, it provides for an extension on maturity of indebtedness to July 1, 2022.
The amendment will also provide Fixed Charge Coverage Ratio relief in the second and third quarters of Diamond Estates’ 2021 fiscal year. During the same quarters, the amendment also allows for the deferral of the company’s principal payment obligations.
Countless other companies are also currently renegotiating their credit facility agreements, in the midst of the COVID-19 pandemic and its resulting economic impact.
In return for the amendment, Diamond Estates has provided its lender with a consideration comprised of non-transferable bonus warrants. Bank of Montreal has been issued with 750,000 bonus warrants, which are exercisable into common shares in the company.
Each warrant can be exercised into one common share in Diamond Estates, for 16 cents per bonus share.
The warrants will expire on July 1, 2022, while the bonus shares are subject to a hold period of four months and one day, from the date the warrants are issued.
Diamond Estates Wines and Spirits (DWS) remains unchanged and is trading at 16 cents per share at 9:45am EDT.
