Worthington Steel Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
On March 25, 2025, Tempel Canada Company (“Tempel Canada”), a subsidiary of Worthington Steel, Inc. (“we,” “us,” “our” and “registrant”), entered into a letter of offer (“Letter”) with Business Development Bank of Canada (“BDC”). Pursuant to the terms of the Letter, BDC has committed to lend Tempel Canada up to CAD $57,500,000 (“Loan”), subject to the satisfaction of customary closing conditions and deliverables. The purpose of the Loan is to fund the construction of a new manufacturing facility to be located in Burlington, Ontario, Canada (“Property”).
The Loan is structured as a construction draw loan. The draw period for the Loan will lapse on March 21, 2026, unless extended by BDC. Monthly interest only payments will be due until July 1, 2026, at which point the Loan will also be subject to monthly amortization payments until maturity. The Loan will accrue interest (a) during the construction period, at a per annum rate equal to BDC’s Floating Base Rate minus 1.75%, and (b) at all times thereafter, at a per annum rate equal to BDC’s Floating Base Rate minus 1.75% or BDC’s Base Rate minus 1.75%, at Tempel Canada’s election. The Loan matures on June 1, 2051.
We will guarantee the payment obligations of Tempel Canada in respect of the Loan, limited to 20% of the Loan amount on the date of any demand, which guaranty is eligible to be released once the Loan balance reaches CAD $40,000,000, subject to the satisfaction of certain conditions. We will also provide customary cost overrun and completion guarantees in respect of the construction of the Property. The obligations of Tempel Canada under the Letter are secured by a mortgage on the Property, an assignment of rents relating to the Property, and a lien on certain equipment and other personal property located on or used in connection with the Property.
The Letter contains representations, covenants and events of default customary for transactions of this nature, including that Tempel Canada will maintain a Total Debt to Tangible Equity Ratio of 1.0 to 1.0 and a Fixed Charge Coverage Ratio of 1.15 to 1.0, each tested annually. Tempel Canada will pay customary fees and expenses in connection with the closing of the Loan.
The foregoing description of the Letter is not complete and is qualified in its entirety by reference to the full text of the Letter, a copy of which will be filed as an exhibit to our annual report on Form 10-K for the fiscal year ending May 31, 2025.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Letter is hereby incorporated into this Item 2.03.
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.
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WORTHINGTON STEEL, INC. |
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Date: |
March 31, 2025 |
By: |
/s/ Joseph Y. Heuer |
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Joseph Y. Heuer |