Pursuant to the terms of the credit facility, the borrower may borrow a maximum of 75% of the value of awarded sales contracts, approved by Dexia Bank, to a maximum of EUR2 million, along with a maximum of EUR1.5 million for general business purposes.
The credit facility bears interest at a rate of Euribor plus 1.45% per annum. It is secured by a EUR1 million first secured charge covering all of the assets of the borrower, which may be increased to EUR1.5 million in certain circumstances, and contains a negative pledge precluding the Borrower from providing security over its assets. Additionally, the borrower is required to maintain a solvency covenant, defined as equity plus current account divided by total liabilities, of not less than 25% and ensure that its inter-company account with Hydrogenics does not decrease to less than EUR5 million at any time. As of November 30, 2009, the inter-company account was about EUR5.1 million.
“This operating facility will provide increased working capital for our electrolyzer operations next year and speaks to the increased availability of attractive credit in our end markets,” Hydrogenics President and Chief Executive Officer Daryl Wilson said. “The facility will allow our European operations greater flexibility to more rapidly respond to customer orders and ship equipment in a more timely manner. Given our growth plans for 2010, we felt that now was the best time to take advantage of this opportunity.”
