Baylin, lender RBC extend credit facility maturity

Executive Summary

• Baylin Technologies amended its credit facility with Royal Bank of Canada, extending the maturity to April 30, 2026, and replacing liquidity covenants with senior debt-to-EBITDA and fixed charge coverage ratios.
• The share purchase agreement for the acquisition of Kaelus AB was amended to extend the financing condition deadline from January 28 to February 28, 2026.
• The company is negotiating a $30.9-million non-revolving senior secured loan from a Canadian private credit lender to help satisfy the acquisition's financing requirements.

Key Details

• Credit Facility Amendment:
  • Lender: Royal Bank of Canada.
  • Maturity Extension: Extended from January 31 to April 30, 2026.
  • Covenant Changes: The previous minimum liquidity requirement of $3-million was replaced by:
    • Senior debt to EBITDA ratio not to exceed 2.75 to 1.00.
    • Fixed charge coverage ratio to exceed 1.15 to 1.00.
    • Both ratios determined on a monthly basis.
• Acquisition of Kaelus AB:
  • Financing Condition Extension: Extended from January 28 to February 28, 2026.
  • Total Cash Requirement: Approximately $42-million, covering the cash portion of the purchase price, repayment of all outstanding indebtedness to the principal lender, and third-party expenses.
  • Proposed Loan Structure:
    • Amount: $30.9-million.
    • Type: Non-revolving senior secured loan.
    • Term: 36 months.
    • Lender: Canadian private credit lender (existing non-binding term sheet).
    • Use of Proceeds: To repay the credit facility in full and finance part of the cash portion of the purchase price.
    • Status: Subject to negotiation of definitive agreements, security, and satisfaction of conditions.
  • Alternative Funding: In December 2025, the company completed a private placement of subscription receipts raising $10.3-million. The proposed loan plus these proceeds are intended to satisfy the financing condition.
  • Regulatory and Shareholder Approvals:
    • Subject to approval by the foreign investment review authority in Finland.
    • Subject to shareholder approval via written consent from the controlling shareholder under TSX Section 604(d).
  • Completion Timeline: Expected in the first quarter of 2026, subject to all conditions.
  • Risk: No assurance that the binding loan agreement will be executed; failure to satisfy the financing condition may result in the acquisition not being completed.

Notable Quotes

• None provided in the text.