Quantum Secures $210 Million Long-Term Financing

Quantum Corp. completed a refinance of its current debt facilities. 

The new $210 million of total credit facilities consist of a $165 million senior secured term loan facility, led by an investment fund managed by a US-based global fixed income asset manager, along with a $45 million revolving credit facility from the company’s current revolving credit facility lender.

The new loan facility will be used to repay the company’s outstanding debt and related fees and interest (totaling $124.6 million with respect to its current term loan and $21.2 million with respect to its current revolving credit facility), provide capital to fund ongoing growth initiatives, and to support other general corporate purposes. 

The company’s cash and cash equivalents as of the date of this release are approximately $14 million, and the amount drawn down under the new revolving credit facility is $4.4 million.

“This financing is a major milestone for Quantum and validates our credit-worthiness and business model outlook,” says Jamie Lerner, chairman and CEO.  “This facility, along with our other financial resources, positions us to execute our growth strategy.  We look forward to re-engaging with the investment community once we resolve the inherited challenges related to our previously announced restatement.”

Key Terms of the loans are as follows:

• Aggregate principal amount of up to $165 million, of which $150 million will be drawn at closing and $15 million will be funded (without contingencies) on or before January 11, 2019;
• Maturity: 5 years from closing date;
• Interest rate: Libor plus 1,000 basis points per annum, payable monthly in cash, calculated on an actual / 360-day basis, with a Libor floor equal to 2.0%;
• Warrants to purchase an aggregate of 7,110,616 shares (subject to customary anti-dilution adjustments) of the company’s common stock were issued to the lenders. The warrants have an exercise price of $1.33 per share and are exercisable for a 10-year period; and
• Quantum will also obtain a revolving credit facility in an amount up to $45,000,000.

As announced in August 2018, the company received an extension for continued listing and trading of the company’s common stock on the NYSE until January 15, 2019. If the company does not become current with its SEC periodic filings and report its restated financial results by this date, the NYSE could grant a final extension to February 15, 2019. It is also possible that the NYSE declines to grant such an extension or that it initiates delisting procedures earlier than January 15, 2019, based on a variety of factors, including the status of the company’s process to become current in its SEC filings. The company cautions investors that its shares may be subject to delisting on or about January 15, 2019, should an extension not be granted by the NYSE. Should circumstances change regarding the timing of completion of all outstanding filings, then the NYSE could take delisting action sooner. If the company’s shares are delisted from the NYSE, the company would expect its shares to continue to trade on an alternative market.

Real also:
Quantum Obtains New York Stock Exchange Listing Extension
Until January 15, 2019
2018.08.16 | Press Release
Quantum not in Compliance With New York Stock Exchange
Because company has not filed Form 10-Q for 3FQ18 Ended December 31, 2017
2018.02.19 | Press Release