| Item 1.01. | Entry into a Material Definitive Agreement. |
Amendment to Credit Agreement
On June 29, 2021, Ampco-Pittsburgh Corporation (“Ampco-Pittsburgh”), as a guarantor, and certain of its subsidiaries (collectedly, the “Corporation”) entered into the First Amended and Restated Revolving Credit and Security Agreement with certain lenders, the other guarantors party thereto, and PNC Bank, National Association, as agent for the lenders (collectively, the “Restated Credit Agreement”). The Restated Credit Agreement expires on June 29, 2026, and, subject to other terms and conditions of the Restated Credit Agreement, would become due on that date. The Restated Credit Agreement amends and restates the Revolving Credit and Security Agreement, dated May 20, 2016, as amended on October 31, 2016, on March 2, 2017, on September 28, 2018 and on June 23, 2020, with certain other lenders; the guarantors party thereto, including Ampco-Pittsburgh; and PNC Bank, National Association, as agent for the lenders.
Borrowers to the Restated Credit Agreement include Air & Liquid Systems Corporation, Union Electric Steel Corporation, Alloys Unlimited and Processing, LLC, Akers National Roll Company, Union Electric Steel UK Limited, Åkers AB and Åkers Sweden AB.
The Restated Credit Agreement provides for a $100,000,000 senior secured asset-based revolving credit facility (the “Revolving Facility”), which can be increased up to $130,000,000 at the option of the Corporation and with the approval of the lenders. The Revolving Facility includes sublimits for letters of credit not to exceed $40,000,000 and European borrowings not to exceed $30,000,000. Borrowings under the Revolving Facility will bear interest, at the Corporation’s option, at either (i) LIBOR plus an applicable margin ranging between 2.00% and 2.50% or (ii) the alternate base rate plus an applicable margin ranging between 1.00% and 1.50%. The Restated Credit Agreement contains customary affirmative and negative covenants and limitations, including, but not limited to, investments in certain subsidiaries, payment of dividends, incurrence of additional indebtedness and guaranties, and acquisitions and divestitures. In addition, the Corporation must maintain a certain level of excess availability or otherwise maintain a minimum fixed charge coverage ratio of not less than 1.05 to 1.00.
The obligation of the Corporation to pay amounts outstanding under the Restated Credit Agreement may be accelerated upon the occurrence of an “Event of Default,” as defined in the Restated Credit Agreement. Such Events of Default include, among others, (1) the Corporation’s failure to pay when due any principal, interest, other fee, charge, amount, or liability owed under the Restated Credit Agreement, (2) any representation or warranty of the Corporation in the Restated Credit Agreement being incorrect or misleading in any material respect on the date when made, (3) the Corporation’s failure to perform, keep or observe any term, provision, condition, or covenant contained in the Restated Credit Agreement, and (4) the Corporation or any of its affiliates commencing a voluntary case under any state or federal bankruptcy or receivership laws or being adjudicated bankrupt or insolvent.
The foregoing description of the Restated Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Restated Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety. Any capitalized terms used in this Current Report on Form 8-K, but not defined herein have the meaning set forth in the Restated Credit Agreement.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
To the extent applicable, the information included in Item 1.01 is incorporated by reference into this Item 2.03.
| Item 7.01. | Regulation FD Disclosure. |
On July 1, 2021, Ampco-Pittsburgh issued a press release announcing the entering into the Restated Credit Agreement. A copy of the press release is furnished herewith as Exhibit 99.1.
