PSI Announces Extension to Credit Agreement

Source: 3/26/2021, Location: North America

Power Solutions International, Inc. (“PSI”), a leader in the design, engineering and manufacture of emission-certified engines and power systems, announced today that it entered into a $130 million uncommitted senior secured revolving credit facility pursuant to that certain amended and restated uncommitted revolving credit agreement dated March 26, 2021 (the “amended Credit Agreement”), between the Company and Standard Chartered Bank (“Standard Chartered”).

Among other items, the amended Credit Agreement extends the maturity date of loans thereunder to the earlier of March 25, 2022 or the demand of Standard Chartered and includes minimum Consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the second, third and fourth quarters of 2021. Also, borrowings under the amended Credit Agreement will incur interest at a rate of LIBOR + 2.70% per annum. The amended Credit Agreement is fully drawn at March 26, 2021.

In connection with the execution of the amended Credit Agreement, the Company also entered into an amendment and restatement of the shareholder’s loan agreement originally executed with its majority stockholder, Weichai America Corp. in December 2020 (the “First Amended and Restated Shareholder’s Loan Agreement”). The First Amended and Restated Shareholder’s Loan Agreement provides the Company with access of up to $130 million of credit solely for purposes of repaying outstanding borrowings under the amended Credit Agreement. The First Amended and Restated Shareholder’s Loan Agreement terminates on April 25, 2022.

Additional details on the amended Credit Agreement and the First Amended and Restated Shareholder’s Loan Agreement can be found in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 26, 2021.

Management Commentary
Lance Arnett, chief executive officer, commented, “We appreciate Standard Chartered’s continued support of PSI. With this agreement in place, we look forward to executing on our business objectives during 2021. We will also continue to work in tandem with our strategic partner and majority stockholder, Weichai, to explore longer term financing options with current or other lenders during the year.”

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