There was an waiver included on the 2021 fiscal year for the working capital ratio. Must have been thinking safe loading if they received that kind of loan during the pandemic.
Montreal, Quebec. – July 9, 2020 - Birks Group Inc. (the “Company” or “Birks”) (NYSE American LLC: BGI), announced the closing of a CAD$10 million subordinated secured term loan with Investissement Québec (“IQ”) on July 8, 2020. This new term loan will be used to support the working capital needs of the Company following the impacts of COVID-19 and increases the Company’s borrowing capacity, allowing it to continue the relaunch of its operations, including the full re-opening of its store network throughout Canada, and omni-channel value-creation initiatives in a COVID-19 environment.
The new term loan, which matures in July 2024, is subordinated to the Company’s existing senior secured revolver facility with Wells Fargo Capital Finance Corporation Canada (“Wells Fargo”) and Crystal Financial LLC (“Crystal”). The loan bears an interest rate of 3.14% per annum, is repayable in 36 equal payments beginning in July 2021 and requires the Company to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01, calculated on an annual basis.
Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: “We are pleased to announce this financing with Investissement Québec, a long-time partner of the Company. The closing of this deal at favorable terms to the Company is reflective of our strong partnership with IQ. It will provide us with increased financial flexibility needed to accomplish our long term strategic objectives. We appreciate the support of IQ and look forward to working closely with their team as we continue to align the Company towards long-term value creation.”
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