Shoals Technologies Group Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
$SHLS
Semiconductors
Technology
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 19, 2024
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Item 1.01 Entry into a Material Definitive Agreement.
On March 19, 2024 (the “Effective Date”), Shoals Technologies Group, Inc. (the “Company”), as borrower, and certain of its subsidiaries entered into Amendment No. 6 (the “Amendment”) to the Credit Agreement, dated as of November 25, 2020, with Wilmington Trust, National Association, as Collateral Agent, JPMorgan Chase Bank, N.A., as Administrative Agent, and each L/C issuer and lender from time to time party thereto (as amended prior to the Effective Date, the “Existing Credit Agreement,” and as amended from time to time, the “Amended Credit Agreement”).
The Amendment, among other things, (i) provides for a new tranche of revolving loans in an aggregate principal amount of $200,000,000 (the “2024 Revolving Loans”), (ii) reduces the interest rate margin applicable to revolving loans outstanding under the Amended Credit Agreement by at least 0.25% with additional 0.25% step-downs if the consolidated first lien secured leverage ratio does not exceed certain thresholds (which step-downs will step back up if such leverage ratio exceeds those thresholds), (iii) reduces the commitment fee applicable to the undrawn revolving loans under the Amended Credit Agreement by at least 0.10% with additional 0.05% step-downs if the consolidated first lien secured leverage ratio does not exceed certain thresholds (which step-downs will step back up if such leverage ratio exceeds such thresholds), (iv) lowers the maximum consolidated first lien secured leverage ratio permitted under the Amended Credit Agreement to (a) 4.25:1.00 from April 1, 2024 through March 31, 2025 and (b) thereafter, 4.00:1.00 (with temporary increases to the maximum consolidated first lien secured leverage ratio in the event a material acquisition closes), (v) extends the maturity date applicable to the revolving loans under the Amended Credit Agreement to March 19, 2029, the fifth anniversary of the Effective Date and (vi) amends certain covenants under the Amended Credit Agreement in a manner customary for facilities of this type.
The 2024 Revolving Loans will refinance in full the revolving loans outstanding immediately prior to the Effective Date (the “Existing Revolving Loans”). The 2024 Revolving Loans have substantially the same terms as the Existing Revolving Loans, except as summarized herein. The 2024 Revolving Loans may be prepaid at any time, without premium or penalty.
On the Effective Date, the 2024 Revolving Loans will bear interest at a rate equal to, at the Company’s election, either adjusted term SOFR or base rate (each, as defined in the Amended Credit Agreement) plus (i) in the case of SOFR loans, 2.50% per annum and (ii) in the case of base rate loans, 1.50% per annum.
On the Effective Date, the Company used cash from the balance sheet to make a $44.4 million voluntary prepayment of all the outstanding term loans under the Existing Credit Agreement, thereby terminating all term loan commitments under the Existing Credit Agreement.
The foregoing description of the Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated by reference to this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are filed herewith:
| Exhibit No. | Description | |||||||
| 10.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Shoals Technologies Group, Inc. | |||||||||||
| By: | /s/ Dominic Bardos | ||||||||||
| Name: | Dominic Bardos | ||||||||||
| Title: | Chief Financial Officer | ||||||||||
Date: March 22, 2024