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FP Newspapers Inc. — Capital/Financing Update 2020
Feb 1, 2020
46696_rns_2020-01-31_e649b464-d1d4-49ef-a8a5-ef5e7406b18b.pdf
Capital/Financing Update
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Form 51-102F3 Material Change Report
Item 1 Name and Address of Company
FP Newspapers Inc. (“ FPI ” or the “ Company ”) 1355 Mountain Avenue Winnipeg, MB R2X 3B6
Item 2
Date of Material Change
January 31, 2020
Item 3 News Release
The news release was disseminated through Accesswire on January 31, 2020 and filed on SEDAR.
Item 4 Summary of Material Change
On January 31, 2020, the Company announced that FP Canadian Newspapers Limited Partnership (“FPLP”) has completed a long-term debt renewal agreement with HSBC Bank Canada. The loan has an authorized limit of $13.5 million and FPLP will make a $2.0 million repayment on or before the January 31 renewal date.
Item 5 Full Description of Material Change
5.1 Full Description of Material Change
The loan includes annual principal repayments of $1.0 million due on June 1 along with a cash sweep to be paid no later than 90 days after the end of each fiscal year with the first sweep due on March 31, 2021 for the 2020 fiscal year. The cash sweep is equal to 20% of FPLP’s annual distributable cash as defined in the agreement. The new loan agreement matures on January 31, 2023.
Similar to the original facility, the renewal facility includes negative covenants which must be observed in order to avoid an accelerated termination of the agreement. The maximum leverage ratio is 3.0 to 1 as long as the outstanding loan balance is at or above $10.0 million and below this level there is no requirement to maintain a specified leverage ratio. The fixed charge coverage ratio cannot fall below 2.0 to 1 while the loan balance is at or above $10.0 million and reduces to 1.5 to 1 when the outstanding loan balance falls below $10.0 million. The ratio calculations are defined in the agreement and measured quarterly on a trailing 12 month basis. The loan is secured by all of the assets of the businesses and additionally a mortgage registered on FPLP’s Winnipeg land and buildings. The variable interest rate is based on a grid determined by the trailing 12 month leverage ratio and is currently at its lowest level at 4.05%.
5.2 Disclosure on Restructuring Transactions
Not applicable.
Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102
Not applicable.
2
Item 7 Omitted Information
None.
Item 8 Executive Officer
Dan Koshowski, Chief Financial Officer Business Telephone: (204) 771-1897
Item 9 Date of Report
January 31, 2020