GrafTech amendment cuts revolver to $225 million, modifies covenants

By Wendy Van Sickle

Columbus, Ohio, April 28 – GrafTech reduced its revolving credit facility to $225 million from $375 million under a Thursday amendment to its credit agreement, according to its 10-Q filing with the Securities and Exchange Commission.

The amendment also added new covenants, including a requirement to make mandatory repayments of outstanding amounts under the revolver and the term loan facility with the proceeds of any substantial sale of assets included in the company’s Engineered Solutions segment.

Also added was a requirement to maintain minimum liquidity of $25 million.

The covenants were also modified to eliminate certain exceptions to GrafTech’s negative covenants limiting the company’s ability to make certain investments, sell assets, make restricted payments, incur liens and incur debt.

A restriction was added to the amount of cash and cash equivalents permitted to be held on the balance sheet at any one time without paying down the revolver.

The company’s financial covenants were changed such that, until the earlier of March 31, 2019 or the date the company has $75 million in trailing 12-month EBITDA, GrafTech is required to maintain trailing 12-month EBITDA above certain minimums ranging from $35 million to $40 million.

Under the amendment, the company has full access to the $225 million revolver subject to the $25 million minimum liquidity.

As of March 31, GrafTech had $69.1 million drawn on the revolver, including $8.1 million of letters of credit.

The company had $38 million outstanding on its term loan facility.

This amendment allows GrafTech to further explore strategic alternatives for its Engineered Solutions business segment, including the sale of all or a part of the segment.

Based in Independence, Ohio, GrafTech manufactures graphite materials for customers in the steel manufacturing, advanced energy and electronics industries.

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