TORONTO – Major unitholders of Arctic Glacier Income Fund (TSX: AG.UN) said Monday they have a proposed $300-million refinancing plan for the financially troubled packaged ice maker, which is in default to its lenders.
The proposed refinancing would repay the fund’s existing lenders in full and leave the ice maker financially healthier to pursue future growth, said Coliseum Capital Partners, Talamod Master Fund and an institutional lender.
The plan includes new secured credit facility, a secured term loan and new equity financing from a rights offering available to all unitholders and to be backstopped by the major unitholder group.
“We are thrilled to propose a financing for Arctic Glacier that provides a full-scale solution to capital structure challenges that have been severely disruptive and distressing to all stakeholders,” said Chris Shackelton of Coliseum.
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“We believe that this is a transformational plan that will position Arctic Glacier to take advantage of future opportunities in their business and industry,” Shackelton said in a news release.
Earlier this month, the Winnipeg-based ice maker disclosed it was officially in default to lenders.
Arctic Glacier has said the fund’s second lien secured lenders, CPPIB Credit Investments Inc. and West Face Capital Inc., had refused to extend their waivers of certain covenants under the fund’s credit facilities.
Arctic Glacier was in breach of covenants governing maximum leverage ratio, interest coverage ratio, fixed charge coverage ratio and minimum EBITDA levels under its credit facilities on June 30, but the secured lenders had waived compliance until early September.
In late August, Arctic Glacier disclosed that two of its major investors have asked for a special meeting to remove and replace the fund’s current trustees. These unitholders, Coliseum and Talamod, which collectively own more than 10 per cent of Arctic Glacier’s units, have said they wanted the meeting to be held by Sept. 30.
The dissident group said the current trustees and management of Arctic Glacier had not provided a satisfactory response to requests for a meaningful dialogue.
Units in Arctic Glacier closed at eight cents, up from three cents, on Monday on the Toronto Stock Exchange.
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