Fluence Corporation Repays Loans and Secures New Revolving Facility
FLUENCE CORPORATION LIMITED (FLC) Share Update July 2024 Monday 29th
Fluence Corporation Repays Loans and Secures New Revolving Facility
Fluence Corporation Limited (ASX: FLC) has announced the full repayment of its Upwell and Bimini loans and the establishment of a new revolving credit facility.
Instant Summary:
- Fluence repays US $30.3 million Upwell Facility loan.
- Full repayment of US $14.25 million Bimini Project Loan.
- Secures new revolving credit facility of up to US $15.0 million.
- New facility has more favorable terms and mirrors the US Prime Rate.
- Initial term of 21 months with an option to extend for up to three months.
Loan Repayment Details
Fluence Corporation Limited has successfully repaid its Loan Facility with Upwell Water LLC. Since the Upwell Facility was established in July 2020, Fluence had drawn down US $30.3 million, a significant portion of which was repaid during 2023 and the first half of 2024. The remaining balance has now been fully repaid.
In addition to the Upwell Facility, Fluence has also repaid the Bimini Project Loan, totaling US $14.25 million across both loans. This repayment marks the termination of the Upwell Facility and the release of all collateral underlying the loan. Upwell retains the option to provide project debt financing for future Build-Own-Operate (BOO) projects presented by Fluence.
New Revolving Credit Facility
Fluence has replaced the Upwell Facility with a new revolving credit facility for up to US $15.0 million. The new Revolving Facility offers more favorable terms compared to the Upwell Facility and will be utilized for working capital and future projects. The interest rate on the Revolving Facility is variable and will mirror the US Prime Rate, currently at 8.5%.
The initial term of the Revolving Facility is 21 months, with an option for the company to extend for up to three months at an interest rate of Prime Rate plus 2%. Security for the Revolving Facility is limited to no more than five percent of the company's equity interests unless shareholder approval is obtained under ASX Listing Rule 10.1. The facility is provided by Niko Oldendorff and Doug Brown, both of whom are on Fluence's Board of Directors and long-term supporters of the business.
CEO's Comments
Fluence CEO Tom Pokorsky expressed gratitude to Upwell for their support over the past four years and their willingness to potentially partner again on future BOO projects. He noted that the repayment of the Upwell Facility and securing the Revolving Facility represents a significant milestone for Fluence, providing considerable interest savings and operational flexibility while supporting continued growth.
The repayment of the Upwell and Bimini loans, along with the establishment of a new revolving credit facility, is a positive development for Fluence Corporation. It reduces debt and interest expenses, enhancing the company's financial flexibility. This move is likely to be well-received by investors and could positively impact Fluence's stock price.
Investor Reaction:
Analysts are likely to view this development favorably, as it demonstrates Fluence's commitment to improving its financial health and operational efficiency. The new revolving credit facility on more favorable terms is expected to provide the company with the necessary capital to support its growth initiatives.
Conclusion:
Investors should consider the potential long-term benefits of Fluence's improved financial position and the new revolving credit facility. This strategic move is expected to support the company's growth and enhance shareholder value. Stay informed about Fluence Corporation's future developments and assess the potential impacts on your investment portfolio.