Spark Power Provides Update on Restatement of Third Quarter Financial Statements, Extension of BMO Credit Facility Maturity and Offering of Convertible Debentures
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OAKVILLE, ON / ACCESSWIRE / March 10, 2021 / Spark Power Group Inc. (“Spark Power” or the “Company”) (TSX: SPG) today provided an update to its March 5, 2021 press release, in which Spark Power has announced that it will file again its unaudited condensed interim financial statements for the three- and nine-month periods ended September 30, 2020 (the “previously filed interim financial statements”) as well as the corresponding management report (the “previously filed interim management report”) .
Amended and restated interim financial statements
As an update to the March 5, 2021 press release, the Company provides the following additional details:
- In connection with the filing of the prospectus relating to the offering, Spark Power has engaged its auditors to perform a review of the previously filed interim financial statements and the previously filed interim MD&A. During the auditor’s review, the Company identified a balance sheet classification error.
- The classification error relates to the treatment of the Company’s non-revolving term loan and revolving acquisition line, totaling approximately $ 38.3 million and $ 24.4 million, respectively, which have been classified as liabilities. long-term ; being debts overdue for more than one year from the date of the statements. The maturity of these debts has been indicated in the interim financial statements previously filed as at September 30, 2027. However, the two loans are in fact due and payable on September 30, 2021, with amortization ending in September 2027. Since the Debts must actually mature exactly one year from the date of the previously filed interim financial statements, they must be presented as current liabilities on the balance sheet.
- Therefore, the total amount drawn on these facilities must be presented as a current liability as at September 30, 2020 and the previously filed interim financial statements will be amended and restated to reflect this change in categorization (the “Amended and Restated Interim Financial Statements Financial Statements ”), the updated notes thereto and an amended and updated MD&A (the“ Amended MD&A ”) thereon will also be re-filed.
- This reclassification of the balance sheet does not change the operating results for the period, nor the total assets or liabilities at the end of the period, as presented by the Company.
- As a result of this change in categorization, the amended and restated interim financial statements must include a note indicating that there is a level of uncertainty that may cast doubt on the ability of the Company to continue as a going concern. The Company believes that it has the appropriate plans to mitigate the above event, but these plans have not yet been completed.
Commentary on debt maturities and loan syndication
As a further update of the Company’s debt syndication process with its primary lender, the Company provides the following details:
- The Company’s principal lender is Bank of Montreal (“BMO”).
- The Company began discussions with BMO about syndicating its credit facility in early 2020. With the outbreak of the pandemic, this process was put on hold until the remainder of 2020.
- During this time, the Company worked with BMO to successfully obtain modifications to its existing credit facility to support the Company during the difficult times brought on by the pandemic, and the Company has continuously managed under these amended terms.
- The objective of the syndication process is to refinance the aforementioned non-revolving term loan, the revolving acquisition line and all credit facilities into longer term credit facilities and to extend the Company’s debt facilities. to support the future growth of the company.
- As an interim step in the syndication, BMO is currently seeking to extend the maturity date of the non-revolving term loan and revolving acquisition line from September 30, 2021 to June 30, 2022. Although there is no has no guarantee that the deadline will be extended, Spark Power expects the extension to be formalized successfully this week.
- If BMO approves the extension of these maturities, all amounts overdue on these loans will be re-presented as long-term liabilities in the Company’s financial statements for periods ended after the date of such extension, to the extent that refunds are then not due within 12 months.
Status of the purchased offer
On February 18, 2021, the Company announced that it had entered into an agreement to complete a $ 20.0 million bought deal offer (the “Offer”) of 7.50% convertible unsecured subordinated debentures due. in 2026 with a syndicate of underwriters (the “Underwriters”) led by Raymond James Ltd. As a further update to the offer, the Company provides the following details:
- The Company is in discussions with the Underwriters regarding the completion of the Offering.
- The Offer will not close on March 11, 2021 as initially planned.
- The Offer has not been terminated, however, there can be no assurance that the Offer will be completed, as currently announced, or not at all.
The Company will provide further information regarding the filing of the amended and restated interim financial statements, its amended MD&A and details of the offering as more information becomes available.
About Spark Power
Spark Power, a wholly owned subsidiary of Spark Power Group Inc. (TSX: SPG), is a leading independent provider of end-to-end power contracting, operation and maintenance services, and power generation solutions. energy sustainability to industrial, commercial, utility, and renewable asset markets in North America. We work to earn the right to be our customers’ trusted energy partner. “Our highly skilled and dedicated employees, located in the communities we serve, combined with our knowledge of the energy industry , our technological expertise and our commitment to security, ensure that we provide the right solutions that keep our customers’ operations operational today and better equipped for tomorrow. www.sparkpowercorp.com.
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THE SOURCE: Spark Power Group Inc.
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