MALVERN, Pa .– (BUSINESS WIRE) – PQ Group Holdings Inc. (NYSE: PQG), a leading integrated and innovative global provider of catalysts and specialty services, today announced that its indirect wholly-owned subsidiary, PQ Corporation has allocated a new facility to Senior secured term loan (the “2021 Term Loan Facility”) in an aggregate principal amount of $ 900 million.
The proceeds of the 2021 term loan facility, together with available cash, will be used to repay (1) all of the Company’s obligations under its new term loan agreement, dated July 22, 2020 (the ” 2020 Term Loan ”) and (2) a portion of the Company’s obligations under its Amended and Restated Term Credit Agreement dated May 4, 2016 (the“ 2016 Term Loan Facility ”) and to pay related fees and expenses.
The 2021 term loan facility will be issued at 99.75% of par (or with an initial issue discount of 0.25%), will bear interest at a floating rate of LIBOR (with a minimum LIBOR floor of 0.50 %) plus 2.75% (or, depending on our senior net leverage ratio, 2.50%) per annum, and will mature in June 2028.
“With this term debt financing in place and a targeted closing of the sale of Performance Chemicals in the third quarter, we now expect to be at the high end of the previously forecasted ranges for the expected special dividend ($ 2.50 to $ 3. $ 25 per share) and debt reduction (from $ 450 million to $ 550 million), ”said Mike Crews, executive vice president and chief financial officer of PQ. “Additionally, with continued strong operating results and cash flow generation, we now expect our net debt to adjusted EBITDA ratio to be in the 3x average range by the end of 2021.”
The closing of the 2021 term loan facility, the full repayment of the 2020 term loan facility and the partial repayment of the 2016 term loan facility are expected to occur during the first week of June 2021, subject to usual closing conditions. Payment of the scheduled special dividend is subject to a formal declaration by the board of directors of PQ Group Holdings Inc ..
Nahla A. Azmy
About PQ Group Holdings Inc.
PQ Group Holdings Inc. and its subsidiaries is one of the world’s leading integrated and innovative providers of catalysts and specialty services. We support our customers around the world through our strategically located network of manufacturing facilities. We believe that our products, which are predominantly inorganic, and our services help improve environmental sustainability.
We have two specialized companies positioned in a unique way: Refining services supplies sulfuric acid recycling to the North American refining industry and Catalysts serves the packaging and engineering plastics and the global refining, petrochemical and emissions control industries. For more information, see our website at https://www.pqcorp.com.
Presentation of non-GAAP financial measures
The company has provided financial measures outside of generally accepted accounting principles (“GAAP”) – net debt and adjusted EBITDA (collectively, “non-GAAP financial measures”) – which present results on an adjusted basis. certain elements. The Company uses these non-GAAP financial measures for business planning purposes and to measure its performance against that of its competitors. The Company believes that these non-GAAP financial measures are useful financial measures in assessing its operational performance from period to period excluding certain items which, in the Company’s opinion, are not representative of its core business. These non-GAAP financial measures are not intended to replace and should not be considered superior to the presentation of the Company’s financial results in accordance with GAAP. The use of the terms of non-GAAP financial measures may differ from similar measures presented by other companies and may not be comparable to other similarly titled measures.
The Company is unable to provide a reconciliation of the Company’s non-GAAP financial guidance with the corresponding GAAP measures without unreasonable effort due to the difficulty inherent in forecasting and quantifying certain amounts necessary for such reconciliation. , such as certain other items included in net income and EBITDA as well as the related tax consequences of these items and asset disposals / acquisitions and changes in currency exchange rates that are included in cash flows, due to the uncertainty and variability in the nature and amount of these future charges and costs.
Note on forward-looking statements
Some of the information contained in this press release constitutes “forward-looking statements”. Forward-looking statements may be identified by words such as “anticipates”, “intends”, “plans”, “seeks”, “believes”, “estimates”, “expects”, “plans” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions about our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances which are difficult to predict. Examples of forward-looking statements include, but are not limited to, statements regarding the closing of the sale of Performance Chemicals, the special dividend, debt reduction, the company’s net debt / adjusted EBITDA ratio, the closing the 2021 Term Loan Facility and the use of the proceeds thereof, together with cash on hand, to repay all of the Company’s obligations under the 2020 Term Loan Facility and a portion of the Obligations of the Company under the 2016 Term Loan Facility, and to pay related fees and expenses. Our actual results may differ materially from those contemplated in forward-looking statements. We therefore caution you against relying on any of these forward-looking statements. These are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those mentioned in forward-looking statements include, but are not limited to, our ability to complete the sale of the Performance Chemicals business line on our expected schedule, or at all, regional, national or global political, economic, business, competitive, market and regulatory conditions, including the ongoing COVID-19 pandemic, tariffs and trade disputes, exchange rates and other factors , including those described in the sections entitled “Risk Factors” and “Management Discussion and Analysis of Financial Condition and Results of Operations” in our documents filed with the SEC, which are available on the SEC website at the address www.sec.gov. These forward-looking statements speak only as of the date of this press release. Factors or events that could cause our actual results to vary may appear from time to time and it is impossible for us to predict all of them. We assume no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law.