EDMONTON, Oct 8 /CNW/ - COMMERCIAL SOLUTIONS INC. ("Commercial" or "Company") (TSX:CSA) a leading Canadian distributor of bearings, power transmission equipment, oilfield, industrial, safety, survey and resource management equipment products, announced today that it has entered into a new $16 million senior secured asset-based lending credit facility (the "ABL Facility") with the Bank of America, N.A. and that it has repaid all outstanding indebtedness under its previous credit facility.
"We are very pleased on the signing of the ABL Facility. We believe that it will provide Commercial with the liquidity to meet existing and anticipated future needs," said Rozina Kassam, Commercial's Chief Financial Officer.
The ABL Facility has a maturity date of three years and is subject to a borrowing base that is calculated as a percentage of specified value of eligible inventory and accounts receivable. The ABL Facility includes an opportunity for Commercial to increase the loan to $20 million to fund future growth provided Commercial continues to be in compliance with all covenants on a proforma basis after giving effect to the increase in borrowing amount. Total outstanding debt refinanced by the ABL Facility at the time of closing was approximately $8.7 million.
The ABL Facility is priced at Canadian prime plus 1.5 percent and contains usual positive and negative covenants and minimum tangible net worth and fund availability.
"Our strong balance sheet and the liquidity provided by the new ABL Facility will allow us to focus our efforts on the growth opportunities in the markets we serve. We look forward to continuing to work with our new financial partner on our capital needs for the future," said Jim Barker, Commercial's President and Chief Executive Officer.
About Commercial:
Headquartered in Edmonton, Alberta, Commercial is one of Canada's leading independent industrial distributors with 24 Services Centres and approximately 230 employees located across Canada. Commercial offers more than 160,000 items critical to maintenance repair and operations (MRO) and original equipment manufacturer (OEM) customers. The Company represents 450 leading manufacturers and serves over 11,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, food processing, chemical processing, mining and aggregate, utilities, agriculture and construction. Commercial trades under the symbol "CSA" on the Toronto Stock Exchange. For further information on the Company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.
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