CELADON GROUP, INC. (NYSE:CGI) Files An 8-K Entry into a Material Definitive Agreement

On May 24, 2019, Celadon Group, Inc. (the “Company”) entered into a Seventeenth Amendment to Amended and Restated Credit Agreement (the “Amendment”) by and among the Company, certain subsidiaries of the Company as guarantors, Bank of America, N.A., as lender and Administrative Agent, Wells Fargo Bank, N.A., and Citizens Bank, N.A., both as lenders, which amends the Company\’s existing Amended and Restated Credit Agreement dated December 12, 2014, among the same parties (as amended, the “Credit Agreement”). Among other changes, the Amendment (i) maintains the existing maturity date of June 28, 2019; (ii) reduces the maximum amount of outstanding indebtedness and letter of credit obligations under the Credit Agreement to approximately $122.7 million; (iii) reduces the letter of credit sub-limit to approximately $28.9 million; (iv) reduces the maximum borrowing amount, or loan sub-limit, to approximately $93.8 million; (v) maintains the aggregate commitments of the lenders at approximately $146.2 million; (vi) required the Company to prepare and deliver a weekly disbursements budget acceptable to the lenders (the “Budget”); (vii) prohibits the use of loan or collateral disposition proceeds for categories of expenses not set forth in the Budget; (viii) prohibits weekly disbursements from exceeding the amount set forth in the Budget by more than 10%, subject to certain exceptions; (ix) prohibits disbursements in respect of professional fees from exceeding the amount set forth in the Budget by more than 5% on a cumulative basis; (x) requires weekly reporting of cash disbursements reconciled to the Budget; (xi) eliminates all financial covenants, other than compliance with the Budget as noted above and asset coverage ratio for purposes of determining borrowing and letter of credit availability; (xii) required the Company to prepare and deliver a management action plan intended to result in a transaction that would maximize repayment of the Company’s obligations under the Credit Agreement; (xiii) requires the Company to maintain the engagement of its existing investment banker or to engage a substitute investment banker satisfactory to the lenders; (xiv) defers the due date for approximately $12.3 million in accrued monthly commitment and amendment fees, as well as the monthly commitment fee payment scheduled for June 1, 2019, to the earliest of (A) an event of default under the Credit Agreement, (B) repayment in full of all obligations under the Credit Agreement, and (C) the maturity date; and (xv) eliminates the requirement that the Company consent to an assignment of any loans by the lenders.

The description of the Amendment does not purport to be complete and is qualified in its entirety by the full text of the Amendment, which is filed herewith as Exhibit 10.1.

Item 7.01 Regulation FD Disclosure.

On May 29, 2019, the Company issued a press release announcing the Amendment and certain related matters. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

The information contained in Item 7.01 and 9.01 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The information contained in Item 7.01 and 9.01 hereof and Exhibit 99.1 hereto contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases, including \”anticipates,\” \”will,\” \”intended,\” \”believes,\” and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this report, statements relating to liquidity through the credit facility maturity date, the Repayment Transaction efforts, the Company’s turnaround plan and the potential for returning to profitability, and the statements by Mr. Svindland are forward-looking statements. Actual results may differ from those set forth in the forward-looking statements. Readers should review and consider factors that could cause actual results to differ from expectations, such as the inability to complete a Repayment Transaction, nature of proposals received with respect to any Repayment Transaction and the responses of our existing lenders, cash flow and liquidity shortfalls, the reaction of creditors and other contractual counterparties to the impending credit facility maturity, the ability to negotiate ongoing extensions and amendments of the credit facility and other financial arrangements beyond June 28 or as otherwise needed, the status of litigation and regulatory actions, and various disclosures by the Company in its press releases, stockholder reports, and filings with the U.S. Securities and Exchange Commission.

CELADON GROUP INC Exhibit
EX-10.1 2 exhibit101.htm EXHIBIT 10.1 (SEVENTEENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT DATED MAY 24,…
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About CELADON GROUP, INC. (NYSE:CGI)

Celadon Group, Inc. (Celadon) is a truckload freight transportation provider. The Company’s segments are asset-based, asset-light, and equipment leasing and services. Its services involve point-to-point shipping for its customers within the United States, between the United States and Mexico, and between the United States and Canada. The Company’s primary asset-based services include the United States domestic dry van, refrigerated and flatbed service; cross-border service between the United States and each of Mexico and Canada; intra-Mexico and intra-Canada service; contract service; regional and specialized short haul service, and rail intermodal service. The Company’s primary asset-light services include freight brokerage, warehousing, less-than truckload consolidation and supply chain logistics services. Celadon’s equipment leasing and services segment consists primarily of leasing activities with independent contractors and other trucking fleets.