Will redeem US$120 million convertible debentures
MONTRÉAL, June 17, 2019 (GLOBE NEWSWIRE) -- Dorel Industries Inc. (TSX: DII.B, DII.A) today announced that it has entered into a five-year senior unsecured financing with several institutional lenders, led by Sagard Credit Partners LP, pursuant to a new US$175 million term loan agreement. This credit facility is divided into two tranches: (i) a US$125 million tranche that will be fully drawn and used to redeem at par Dorel’s US$120 million 5.5% subordinated convertible debentures maturing on November 30, 2019; and (ii) a US$50 million tranche that will be available for general corporate purposes with the consent of the lenders. This new credit facility will mature five years from the date of the initial advance, bear interest at a rate of 7.5% per annum payable quarterly in cash, rank pari passu with all of Dorel’s other senior unsecured indebtedness and will be guaranteed by certain of Dorel’s subsidiaries.
Upon redemption of the subordinated convertible debentures, the term of the Company’s senior secured revolving credit facilities and term loan will be extended by its senior lenders to July 1, 2021.
“We appreciate the confidence our lenders have clearly demonstrated in Dorel. The conclusion of this new financing, together with our existing senior secured credit facilities, solidifies our balance sheet, providing a strong foundation to support Dorel and its strategy going forward,” stated Martin Schwartz, Dorel President & CEO.
A notice of redemption will be sent to the registered holders of the 5.5% subordinated convertible debentures in accordance with the Trust Indenture dated October 7, 2014. The subordinated convertible debentures will be redeemed at par and in full.
Dorel Industries Inc. (TSX: DII.B, DII.A) is a global organization, operating three distinct businesses in juvenile products, bicycles and home products. Dorel’s strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. Dorel Juvenile’s powerfully branded products include global brands Maxi-Cosi, Quinny and Tiny Love, complemented by regional brands such as Safety 1st, Bébé Confort, Cosco and Infanti. Dorel Sports brands include Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$2.6 billion and employs approximately 9,200 people in facilities located in twenty-five countries worldwide.
Caution Regarding Forward-Looking Statements
Certain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits Dorel will derive from them. Forward-looking statements are provided in this press release for the purpose of giving information about Management’s current expectations and plans and allowing investors and others to get a better understanding of Dorel’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.
Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from Dorel’s expectations expressed in or implied by the forward-looking statements include: general economic conditions; changes in product costs and supply channels; foreign currency fluctuations; customer and credit risk, including the concentration of revenues with small number of customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources, including compliance with covenants, and the related costs of borrowing; debt refinancing; failure related to information technology systems; changes in assumptions in the valuation of goodwill and other intangible assets and future decline in market capitalization; and there being no certainty that Dorel’s current dividend policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel’s annual Management Discussion and Analysis and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously-mentioned documents are specifically incorporated herein by reference.
Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on Dorel’s business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
Dorel Industries Inc.