Horizon Global Corporation (NYSE:HZN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on February 20, 2019, Horizon Global Corporation (the “Company”) entered into a Credit Agreement (the “Senior Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and the lenders party thereto, which provided for a term loan facility in the aggregate principal amount of $10,000,000. Borrowings under the Senior Term Loan Agreement had been scheduled to mature on March 7, 2019. On March 7, 2019, the Company entered into an amendment to the Senior Term Loan Agreement with the administrative agent and the lenders party thereto to extend the maturity of the Senior Term Loan Agreement to March 14, 2019.
As previously disclosed, the Company does not expect to be in compliance with the net leverage ratio covenant in the Term Loan Credit Agreement, dated as of June 30, 2015, as amended (the “Term Loan Agreement”), among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto, as of December 31, 2018, and the Company has been in active discussions with its lenders regarding amendments to the Term Loan Agreement. Additionally, the Company has been in discussions with its existing lenders and prospective lenders regarding additional financing to satisfy the requirement under the Senior Term Loan Agreement and to better position the Company to address the working capital needs for its 2019 summer selling season and provide additional operating flexibility. On March 8, 2019, the Company received a revised binding commitment from a third party (the “Proposed Lender”) to provide a second lien term facility in the aggregate principal amount of approximately $51,000,000 (the “Second Lien Term Facility”). The Proposed Lender holds a significant amount of the Company’s convertible notes and recently purchased a significant amount of the debt outstanding under the Term Loan Agreement. The Company would use borrowings under the proposed Second Lien Term Facility to, among other things, repay all amounts outstanding under the Senior Term Loan Agreement and for working capital purposes. Consummation of the Second Lien Term Facility or any other additional financing would be subject to the satisfaction or waiver of a number of conditions, including the agreement of the required lenders under each of the Term Loan Agreement and the Company’s revolving credit facility to provide amendments to, among other things, permit the incurrence of the debt under the Second Lien Term Facility and modify certain covenants. There can be no assurance that the Company will be able to successfully consummate the Second Lien Term Facility or any other additional financing.
About Horizon Global Corporation (NYSE:HZN)
Horizon Global Corporation is a designer, manufacturer and distributor of a range of custom-engineered towing, trailering, cargo management and other related accessory products serving the automotive aftermarket, retail and original equipment (OE) channels. The Company operates through two segments: Cequent Americas and Cequent APEA. The Cequent Americas segment consists of two operating segments: Cequent Performance Products (CPP), a manufacturer of aftermarket and original equipment manufacturer (OEM) towing and trailering products and accessories, and Cequent Consumer Products (CCP), a provider of towing, trailering, vehicle protection and cargo management solutions serving the end user through retailers. The Cequent Americas segment has operates in North America, and its towing and trailering-related products are sold through retail, aftermarket and OE channels. The Cequent APEA segment focuses its sales and manufacturing efforts outside of the Americas, operating in Australia.
