Improved debt financing agreement
Executive Summary
- Amaroq Ltd. announced a 14‑month extension of its revolving credit facility with Landsbankinn, now maturing on 1 Feb 2028 (up from Dec 2026).
- The amendment introduces stepped‑down margins tied to EBITDA performance, potentially lowering the margin to 4.5% + SOFR when LTM EBITDA exceeds CAD 70 million.
- A 0.7 % fee of total commitments ($245,000) has been capitalised into Facility B; the overall facility commitment remains US$35.245 million.
Key Details
- Facility Structure:
- Tranche A – US$18.5 M (fully drawn), margin 9.5% → 7.5% after Tranche C becomes available.
- Tranche B – US$10.245 M (fully drawn), same margin terms as Tranche A.
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Tranche C – US$6.5 M, margin 7.5% per annum, available once cumulative EBITDA over the prior three months exceeds CAD 6 million.
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Amendment Terms:
- Extension of facility term from 1 Dec 2026 to 1 Feb 2028 (14‑month extension).
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Additional margin step‑downs based on last‑twelve‑months EBITDA:
- 6.25% if LTM EBITDA > CAD 25 M
- 5.00% if LTM EBITDA > CAD 50 M
- 4.50% if LTM EBITDA > CAD 70 M (plus SOFR).
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Fee: 0.7 % of total commitments (US$245,000) capitalised through Facility B.
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Security Package: Secured by a combination of property and operational equipment mortgages, share pledges over subsidiaries, bank account pledges, and a license transfer agreement.
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Strategic Rationale (CFO Quote): The amendment enhances financial flexibility as the Nalunaq project moves into commissioning and revenue generation, lowering operating costs and supporting further financing opportunities with off‑takers and credit agencies.
Notable Quotes
“We are very pleased to have executed an amendment to our debt financing agreement… extending the maturity … and the potential to improve overall terms to 4.5% plus SOFR, thereby enhancing Amaroq’s financial flexibility.” – Ellert Arnarson, CFO
Materiality Assessment: Material – Positive (the extended term and improved margin structure materially strengthen the company’s balance‑sheet flexibility and cost of capital).