Major unitholders in Arctic Glacier have $300M ref
The Canadian Press, On Tuesday September 20, 2011, 1:57 pm EDT
By The Canadian Press
TORONTO - Units of Arctic Glacier Income Fund (TSX: AG.UN) revived somewhat Tuesday, regaining some of the value they've lost this month as the Winnipeg-based packaged-ice producer struggles with its debt issues.
Arctic Glacier units were up 19 per cent at 9.5 cents with about two million traded by midday in the first day of trading since the fund's major unitholders said Monday they have a proposed $300-million refinancing plans.
The units had opened even higher, at 12 cents, but fell back after Arctic Glacier issued a statement saying the proposal was too preliminary to disclose specific details.
"However, the fund can confirm that it is in active dialogue with the Refinancing Parties to assess the merits of this proposal. The Board of Trustees will consider this proposal, along with all alternatives being considered, acting in the best interests of all unitholders."
The proposed refinancing would repay the fund's existing lenders in full and leave the ice maker financially healthier to pursue future growth, according to Coliseum Capital Partners, Talamod Master Fund and an institutional lender.
The unitholders said their plan includes new secured credit facility, a secured term loan and new equity financing from a rights offering available to all unitholders and to be backstopped by the major unitholder group.
Earlier this month, the Winnipeg-based ice maker disclosed it was officially in default to lenders.
Arctic Glacier has said the fund's second lien secured lenders, CPPIB Credit Investments Inc. and West Face Capital Inc., had refused to extend their waivers of certain covenants under the fund's credit facilities.
Arctic Glacier was in breach of covenants governing maximum leverage ratio, interest coverage ratio, fixed charge coverage ratio and minimum EBITDA levels under its credit facilities on June 30, but the secured lenders had waived compliance until early September.
In late August, Arctic Glacier disclosed that Coliseum and Talamod, which collectively own more than 10 per cent of Arctic Glacier's units, called for a special meeting to be held by Sept. 30 to replace the fund's board of directors.