24 April 2018

5N Plus secures new US$79m syndicated credit facility

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Specialty metal and chemical products firm 5N Plus Inc of Montreal, Québec, Canada has secured a US$79m senior secured multi-currency revolving syndicated credit facility to replace its existing US$50m revolving facility.

5N Plus provides purified metals such as bismuth, gallium, germanium, indium, selenium and tellurium, and also produces related II-VI semiconducting compounds such as cadmium telluride (CdTe), cadmium sulphide (CdS) and indium antimonide (InSb) as precursors for the growth of crystals for solar, LED and eco-friendly materials applications.

Addressing current financing and other corporate purposes, the new credit facility is also expected to be used to finance growth initiatives related to the second and third pillars of the firm’s strategic plan ‘5N21’ to improve profitability while reducing earnings volatility. Unveiled last September, its three main pillars: (a) optimizing the balance of contribution between upstream and downstream activities; (b) extracting more value from core businesses, existing assets and capabilities; and (c) delivering quality growth from existing growth initiatives including future M&A activities.

The new credit facility has a four-year term, bearing interest and a margin based on 5N Plus’ senior consolidated debt to EBITDA ratio. Subject to lenders’ approval, 5N Plus can exercise its option to request an expansion of the credit facility through a US$30m accordion feature that would increase the total size of the facility to US$109m. The syndicate consists of six banks and financial institutions, with HSBC Bank assuming the role of lead arranger and book runner.

5N21 fosters “a new business model which is transforming 5N Plus, as evident by the significant improvement in profitability, substantial enhancement in return on capital employed, reduction in earnings volatility, recurrent cash flows and a solid balance sheet,” says chief financial officer Richard Perron. “Over the past two years we have utilized selectivity as the tenet of our approach to address market opportunities, consolidate assets across the globe, optimize global supply chain and address investment requirements of our business,” he adds. “We are now shifting our focus toward growth initiatives and find a combination of a solid balance sheet along with the conclusion of this new expanded and flexible credit facility timely, to efficiently support and deliver growth in-line with our ambitions.”

See related item:

5N Plus consolidating operations

Tags: 5N Plus

Visit: www.5nplus.com