Just Energy Announces Senior Debt Covenant Amendment and Suspension Of The Dividend On Its Series A Preferred Shares
December 2, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Just Energy Group Inc. (“Just Energy” or the “Company”) announced today that it has amended its senior secured credit facility to increase the senior debt to EBITDA covenant ratio from 1.50:1 to 2.00:1 for the third quarter of Fiscal 2020.
In addition, the Company has amended the covenants on its senior unsecured term loan facility to increase the senior debt to EBITDA covenant ratio from 1.65:1 to 2.15:1 for the third quarter of Fiscal 2020.
Both changes are effective only for the third quarter of Fiscal 2020 and the covenants will revert to the prior levels following December 31, 2019.
In connection with the amendments, the agreements governing both facilities have been changed to restrict the declaration and payment of dividends on the Company’s 8.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Shares (“Series A Preferred Shares”) until the Company’s senior debt to EBITDA ratio is no more than 1.50:1 for two consecutive fiscal quarters.
Accordingly, the Company is suspending, with immediate effect, the declaration and payment of dividends on the Series A Preferred Shares until the Company is permitted to declare and pay dividends under the agreements governing its facilities.
However, dividends on the Series A Preferred Shares will continue to accrue in accordance with Series A Preferred Share terms during the period in which dividends are suspended. Any dividend payment following the suspended period will be credited against the earliest accumulated but unpaid dividend. The Series A Preferred Shares trade on the Toronto Stock Exchange under the symbol “JE.PR.U” and on the New York Stock Exchange under the symbol “JE.PR.A”.
"The previously announced Strategic Review remains active and is progressing. Additionally, the Company continues to implement measures designed to lower costs by eliminating unnecessary overhead and low-return investments, improve the quality of its customer base and fortify operational and financial controls," Just Energy said