DIRTT obtains $15M loan from business development bank

Executive Summary

• DIRTT Environmental Solutions Ltd. has entered into a letter agreement with the Business Development Bank of Canada (BDC) to secure a committed loan facility of up to $15.0 million.
• The financing is structured with an initial disbursement of $10.0 million and a secondary disbursement of $5.0 million, subject to conditions precedent.
• The primary use of proceeds is to partially refinance the company's outstanding 6.00% convertible debentures due January 31, 2026, with the remaining balance to be repaid from cash on hand.

Key Details

• Lender: Business Development Bank of Canada (BDC).
• Total Commitment: Up to $15.0 million.
• Disbursement Structure:
  • Initial disbursement: $10.0 million.
  • Secondary disbursement: $5.0 million.
• Interest Rate: BDC's floating base rate minus 0.75% (currently 6.55% per annum).
• Repayment Terms:
  • Monthly interest-only payments begin on the last day of the month following the first disbursement.
  • Monthly principal repayments commence in May 2026.
  • Maturity Date: April 30, 2032.
• Security/Collateral:
  • General security agreement granting a first-ranking security interest in specific equipment and a security interest in all other present and after-acquired personal property (excluding consumer goods).
  • Corporate guarantee from DIRTT for the full loan amount.
  • Landlord's waivers of distraint.
  • First readvanceable mortgage in the principal amount of $5.0 million (U.S.) on land and buildings located at 325 North Wells St., Chicago, Ill., United States.
• Use of Proceeds:
  • Partial refinancing of outstanding 6.00% convertible debentures due January 31, 2026.
  • Repayment of the remaining $1.6 million principal amount of debentures using cash on hand.

Notable Quotes

• "This financing represents another important step in optimizing our capital structure and strategically positions us to continue executing on our transformative growth plan," said Benjamin Urban, chief executive officer of DIRTT.