Just Energy Announces Amendments to Debt Covenants
Reports Suspension Of In-Store, Door-to-Door Marketing
April 1, 2020 Email This Story Copyright 2010-20 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 2.15:1 and the total debt to EBITDA covenant from 3.50:1 to 4.00:1 for the fourth quarter of the Company’s fiscal year ended March 31, 2020 (the "fourth 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 2.30:1 and the total debt to EBITDA covenant from 3.50:1 to 4.25:1 for the fourth quarter of Fiscal 2020.
Both changes are effective for the fourth quarter of Fiscal 2020 and the covenants will revert to the prior levels following March 31, 2020.
"During this unprecedented time, Just Energy has taken the prudent step to renegotiate terms of our debt covenants," said Scott Gahn, President and Chief Executive Officer of Just Energy. "We continue to work with our senior lenders on a more robust extension of our credit facility to support the long-term health of the business."
Mr. Gahn added, "As a result of the COVID-19 pandemic, we have taken several proactive steps to support the health and wellbeing of our customers, employees, their families and the communities in which we operate, including suspending door-to-door selling, in-store retail partnerships and all business travel. While this decision will adversely affect sales in the short term, it will have a positive near-term liquidity impact due to decreasing selling costs. We are also continuing to reach customers through our digital marketing presence. In addition, we are closely monitoring the directives from health authorities and the impact of COVID-19 on our business. We remain committed to playing our part in limiting the spread of the virus."