Covia Announces Actions Designed to Improve Financial Flexibility
December 31 2019 - 7:00AM
Covia (NYSE:CVIA), a leading provider of mineral-based material
solutions for the Industrial and Energy markets, today announced a
series of actions that are expected to improve its financial
flexibility:
- $85 Million Committed Standby Credit Facility
- The Company has received a commitment from PNC Bank,
National Association for a new, 3-year credit facility for up to
$85 million. The new facility is expected to bear interest of LIBOR
plus 1.75% and be secured by the Company’s U.S. accounts
receivable. In conjunction with the commitment, the Company has
voluntarily canceled its $200 million revolving standby credit
facility that contained restrictive covenants and carried a higher
interest rate.
- Termination of Railcar Purchase Obligations -
The Company and certain railcar manufacturers have entered into
definitive agreements to restructure the Company’s railcar purchase
obligations which were scheduled to mature in 2020 and 2021. The
agreements terminated railcar purchase obligations of approximately
$195 million in exchange for immaterial consideration, which
included cash and lease modifications to a small portion of the
fleet. The Company no longer has any minimum railcar purchase
obligations.
- Additional Standby Liquidity - In addition to
the newly committed $85 million revolving credit facility, the
Company is evaluating additional sources of liquidity to increase
the total size of its standby liquidity. The Company is targeting
up to an additional $75 million in standby liquidity through
secured facilities, which are expected to close in 2020.
Richard Navarre, Chairman, President and Chief Executive Officer
of Covia commented, “We are very pleased with the progress we have
made to improve our financial flexibility. These actions, combined
with our recent repurchase of $63 million in debt and our focus on
lowering operating costs and working capital, are expected to
provide Covia with enhanced financial strength.”
About Covia
Covia is a leading provider of mineral-based material solutions
for the Industrial and Energy markets, representing the legacy and
combined strengths from the June 2018 merger of Unimin and
Fairmount Santrol. The Company is a leading provider of diversified
mineral solutions to the glass, ceramics, coatings, foundry,
polymers, construction, water filtration, sports and recreation
markets. The Company offers a broad array of high-quality products,
including high-purity silica sand, nepheline syenite, feldspar,
clay, kaolin, resin systems and coated materials, delivered through
its comprehensive distribution network. Covia offers its Energy
customers an unparalleled selection of proppant solutions,
additives, and coated products to enhance well productivity and to
address both surface and down-hole challenges in all well
environments. Covia has built long-standing relationships with a
broad customer base consisting of blue-chip customers. Underpinning
these strengths is an unwavering commitment to safety and to
sustainable development further enhancing the value that Covia
delivers to all of its stakeholders. For more information, visit
CoviaCorp.com.
Caution Concerning Forward-Looking
Statements
This release contains statements which, to the extent they are
not statements of historical or present fact, constitute
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995 (“PSLRA”), and such
statements are intended to qualify for the protection of the safe
harbor provided by the PSLRA. The words “anticipate,” “estimate,”
“expect,” “objective,” “goal,” “project,” “intend,” “plan,”
“believe,” “will,” “should,” “may,” “target,” “forecast,”
“guidance,” “outlook” and similar expressions generally identify
forward-looking statements. Similarly, descriptions of the
Company’s objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of the Company’s management as to future
occurrences and trends, including statements expressing optimism or
pessimism about future operating results or events and projected
sales, earnings, capital expenditures and business strategy.
Forward-looking statements are based upon a number of assumptions
concerning future conditions that may ultimately prove to be
inaccurate. Forward-looking statements are based upon management’s
then-current views and assumptions regarding future events and
operating performance. Although the Company’s management believes
the expectations expressed in forward-looking statements are based
on reasonable assumptions within the bounds of its knowledge,
forward-looking statements involve risks, uncertainties and other
factors which may materially affect the Company’s business,
financial condition, and results of operations or liquidity.
Forward-looking statements are not guarantees of future
performance and actual results may differ materially from those
discussed in the forward-looking statements as a result of various
factors, including, but not limited to: changes in prevailing
economic conditions, including fluctuations in supply of, demand
for, and pricing of, the Company’s products; potential business
uncertainties relating to the merger, including potential
disruptions to the Company’s business and operational
relationships, the Company’s ability to achieve anticipated
synergies, and the anticipated costs, timing and complexity of the
Company’s integration efforts; loss of, or reduction in, business
from the Company’s largest customers or their failure to pay the
Company; possible adverse effects of being leveraged, including
interest rate, event of default or refinancing risks, as well as
potentially limiting the Company’s ability to invest in certain
market opportunities; the Company’s ability to successfully develop
and market new products; the Company’s rights and ability to mine
its property and its renewal or receipt of the required permits and
approvals from government authorities and other third parties; the
Company’s ability to implement and realize efficiencies from
capacity expansion plans, and cost reduction initiatives within its
time and budgetary parameters; increasing costs or a lack of
dependability or availability of transportation services or
infrastructure and geographic shifts in demand; changing
legislative and regulatory initiatives relating to the Company’s
business, including environmental, mining, health and safety,
licensing, reclamation and other regulation relating to hydraulic
fracturing (and changes in their enforcement and interpretation);
silica-related health issues and corresponding litigation; seasonal
and severe weather conditions; other operating risks beyond the
Company’s control; the risks discussed in the Risk Factors section
of the Company’s Annual Report on Form 10-K as filed with the
Securities and Exchange Commission (“SEC”) on March 22, 2019; and
the other factors discussed from time to time in the Company’s
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other filings with the SEC. This
release should be read in conjunction with such filings, and you
should consider all such risks, uncertainties and other factors
carefully in evaluating forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. The Company
undertakes no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised, however, to consult any further
disclosures the Company makes on related subjects in its public
announcements and SEC filing.
Investor contact:Matthew
Schlarb440-214-3284Matthew.Schlarb@coviacorp.comSource: Covia
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