Birks Group Inc. (the "Company", "Birks Group" or "we") (NYSE American LLC: BGI) is pleased to provide an update on its corporate activities.
All figures presented herein are in Canadian dollars.
The Company has entered into a commitment letter with SLR Credit Solutions ("SLR"), one of the Company's current senior lenders, whereby SLR has committed to provide the Company with an additional term loan of $13.5million subject to the satisfaction of certain conditions precedent (the "Incremental Loan"). The Incremental Loan would bear interest at the same rate as our current term loan with SLR which is CORRA plus (i) a CORRA adjustment of 0.32% and (ii) 7.75%, and it would be repayable, in full, on December 24, 2026. The proceeds of the Incremental Loan are to be used by the Company to fund a strategic acquisition of jewellery stores (the "Acquisition") and to fund ordinary course working capital. In connection with the Acquisition, the Company has entered into a share purchase agreement to acquire jewellery stores located in a Canadian province where the Company already operates. The Acquisition is subject to a number of conditions precedent, including certain third-party consents and satisfaction of other conditions and covenants customary for an acquisition of this nature. Contemporaneously with the Incremental Loan, Mangrove Holding S.A., one of the Company's controlling shareholders, will enter into a loan agreement with the Company to advance $3.75 million of additional indebtedness to fund our working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026, subject to the satisfaction of certain conditions precedent.
The Company gives no assurance that it will be able to satisfy these conditions and consummate the proposed Acquisition, Incremental Loan and the Mangrove Holding financing on these or any terms.
The Company continues to be actively engaged in identifying alternative transactions to continue pursuing its strategic goals including raising additional funds through public or private equity, debt financing, and the completion of strategic acquisitions or divestitures.