Item 1.01. |
Entry into a Material Definitive Agreement. |
On May 27, 2022, Ampco-Pittsburgh Corporation (“Ampco-Pittsburgh”), as guarantor, and certain of its subsidiaries effected the transactions set forth in that certain Amendment No. 2 to the First Amended and Restated Revolving Credit and Security Agreement dated May 26, 2022 with certain lenders, the other guarantors party thereto, and PNC Bank, National Association, as agent for the lenders (the “Second Amendment to the Restated Credit Agreement”), which is the second amendment to that certain First Amended and Restated Revolving Credit and Security Agreement, dated as of June 29, 2021, between the same parties as listed above (as amended, the “Restated Credit Agreement”), and as previously amended by the Amendment No. 1 to First Amended and Restated Revolving Credit and Security Agreement, dated as of December 17, 2021.
The Restated Credit Agreement provides for, among other things, revolving advances in Swedish or Krona or Euros to Akers Sweden AB and Akers AB, each a subsidiary of Ampco-Pittsburgh (collectively, the “Swedish Borrowers”), in aggregate amounts outstanding at any time equal to the lesser of (x) the lesser of the $30,000,000 European sublimit or the $7,500,000 Swedish sublimit, as the case may be, less the outstanding amount of swing loans to Union Electric Steel UK Limited (the “UK Borrower”) or the Swedish Borrowers, as applicable, less the aggregate maximum undrawn amount of all outstanding letters of credit issued or caused to be issued for the account of the UK Borrower and/or the Swedish Borrowers and (y) an amount equal to the sum of (i) 85% of certain receivables of a Swedish borrower arising in the ordinary course of business (including up to $5,000,000 for certain receivables arising from sales to customers outside Sweden), other than certain receivables of the Swedish Borrowers that are credit insured plus 90% of certain receivables of the Swedish Borrowers that are credit insured, plus (ii) the least of (A) 75% of Eligible Swedish Inventory (as defined in the Restated Credit Agreement), (B) 85% of the appraised net orderly liquidation value of the Eligible Swedish Inventory or (C) $5,000,000, minus (iii) the aggregate maximum undrawn amount of all outstanding letters of credit issued or caused to be issued for the account of the UK Borrower and/or the Swedish Borrowers, minus (iv) such reserves as the agent may reasonable deem proper and necessary from time to time in its permitted discretion.
The Second Amendment to the Restated Credit Agreement amends the Restated Credit Agreement by increasing the amount available under clause (x) of the Swedish sublimit to $15,000,000 through and including October 31, 2022; $12,500,000 during the period commencing on November 1, 2022, through and including November 30, 2022; $10,000,000 during the period commencing on December 1, 2022, through and including December 31, 2022; and $7,500,000 on January 1, 2023 and at all times thereafter. The then-applicable Swedish sublimit shall be reduced to an amount equal to the greater of (y) the difference of the then-applicable Swedish sublimit minus the amount of such Liquidity Event (as defined below) or (z) $7,500,000, upon the occurrence of any of the following (each a “Liquidity Event”): (i) incurrence by any loan party identified in the Restated Credit Agreement of indebtedness (other than Obligations (as defined in the Restated Credit Agreement) (a) incurred for capitalized lease obligations and/or (b) secured by liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (I) any such lien shall not encumber any other property of any loan party identified in the Restated Credit Agreement and (II) the aggregate amount of indebtedness secured by such liens incurred as a result of such purchases together with the amount of permitted indebtedness incurred for capitalized lease obligations incurred during any fiscal year shall not exceed $20,000,000; or (ii) the issuance of any equity interests by any loan party identified in the Restated Credit Agreement.
The Second Amendment to the Restated Credit Agreement additionally temporarily increases the amount available under clause (y) of the Swedish sublimit by temporarily increasing the amount of eligible receivables in connection with sales to customers outside Sweden and temporarily increasing the $5,000,000 limit on Eligible Swedish Inventory. The Second Amendment to the Restated Credit Agreement provides for a temporary increase to the amount of eligible receivables in connection with sales to customers outside Sweden from $5,000,000, as originally stated in the Restated Credit Agreement, to $10,000,000 through and including October 31, 2022; $9,000,000 during the period commencing on November 1, 2022, through and including November 30, 2022; $7,000,000 during the period commencing on December 1, 2022, through and including December 31, 2022; and $5,000,000 on January 1, 2023 and at all times thereafter, singularly or in the aggregate, at any time, provided that upon the occurrence of any Liquidity Event, the then-applicable limit on such receivables shall be reduced to an amount equal to the greater of (I) the difference of the then-applicable limit minus the amount of such Liquidity Event or (II) $5,000,000. The Second Amendment to the Restated Credit Agreement also provides for a temporary increase to the Eligible Swedish Inventory from $5,000,000 to as originally stated in the Restated Credit Agreement, to the lesser of (a) $10,000,000 through and including October 31, 2022; $9,000,000 during the period commencing on November 1, 2022, through