Crius Energy Trust (T.KWH.UN) plunges 26% on re-working credit facility

Gaalen Engen Gaalen Engen,
0 Comments| February 10, 2014

Crius Energy Trust (TSX:KWH.UN, StockForum), a Stamford Connecticut-based energy retailer serving over 400,000 customers in twelve states and the District of Columbia, announced today that the company had expanded its working capital facility with Macquarie Energy from $25.0 million to $60.0 million at a base interest rate of 5.5%.


According to the news release, “On a pro-forma basis as at September 30, 2013, the Trust's cash and cash availability would have been $64.3 million, up from $33.9 million.”


The company will also reduce the used portion of the overall exposure limit from $200.0 million to $150.0 million with an incremental interest rate of 1.25% applied to loans above a certain level.


Also, Macquarie will be issued 750,000 Crius warrants with a strike price of $6.23 per unit on a five-year term where the warrants can be exercised over a four-year schedule.


Crius Energy president and CEO, Michael Fallquist, commented, “We are pleased to have more than doubled the working capital available to our business and increased our financial flexibility through the expansion of this facility.”


Fallquist continued, “The expansion significantly improves the financial capacity of the company and is particularly timely given the current conditions in the retail energy market. This will allow us to take advantage of opportunities that arise in the market while also supporting distributions to our unitholders.”


Then added, “The reduced overall exposure limit of the facility still allows our business to more than double in size.”


And finally summed up, “The Trust and Macquarie Energy are committed to ensuring that the overall exposure limit is sufficient to support our continued growth and financing requirements. The parties have agreed to commence a syndication process soon after close to meet these needs and broaden the group of financing counterparties we work with.”


Crius Energy Trust was in the news recently when the company announced its February 2014 distribution.


Shares fell 26.29% on the news to $4.15 per share.


Currently there are 10.0m outstanding shares with a market cap of $41.6 million.

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