Diamond Estates Wines & Spirits Announces Further Bank Loan Amendment

Rhea-AI Summary

Diamond Estates Wines & Spirits (TSXV: DWS) has announced a Third Amendment to its credit agreement with Bank of Montreal, effective November 15, 2024. Key changes include: establishment of a $2.5 million non-revolving credit facility maturing by July 31, 2025; reduction of the previous non-revolving term credit facility from $8.67 million to $2.98 million; and addition of a Lassonde Industries recourse guarantee. Interest rates were adjusted for various facilities. Additionally, the company issued 184,374 deferred share units to non-executive directors, worth $44,250.00, to be settled in common shares upon retirement.

Positive

• Secured additional $2.5 million credit facility through BMO
• Obtained Lassonde Industries guarantee for the new credit facility

Negative

• Significant reduction in non-revolving term credit facility from $8.67M to $2.98M
• Higher interest rates implemented across credit facilities
• Credit facility subject to demand repayment by BMO

Niagara-on-the-Lake, Ontario--(Newsfile Corp. - November 21, 2024) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond Estates" or the "Company") announces that effective as at November 15, 2024, it entered into a further amendment (the "Third Amendment") to its Second Amended and Restated Credit Agreement (the "SARCA") with Bank of Montreal ("BMO"). The notable terms of the Third Amendment are as follows:

• Credit Facilities. The establishment of a non-revolving credit facility (the "Demand NRT Facility") in the amount of $2,500,000 which matures on the date that is the earlier of: (a) the date BMO demands repayment of all outstanding secured obligations under the Demand NRT Facility; (b) the date on which the Lender is satisfied that the VQA rebate for the 2025 fiscal year has been received by the Company; (c) the fully drawn amount under the Demand NRT Facility is prepaid by the Company; and (d) July 31, 2025.
• Credit Facilities. The non-revolving term credit facility (the "NRT Facility") previously available in the amount of $8,673,000 has been reduced to $2,982,118.
• Lassonde Limited Guarantee. The addition of a limited recourse guarantee granted by Lassonde Industries Inc., in favour of BMO in an aggregate amount not exceeding the Demand NRT Facility secured obligations under the SARCA.
• Interest Rates. The interest rates in respect of the following facilities has been amended to now be as follows:
  • the alternate base rate of Canada plus 2.40% in respect of each Base Rate Canada Loan under the RT Facility;
  • the alternate base rate of Canada plus 2.65% in respect of each Base Rate Canada Loan under the NRT Facility; and
  • the prime rate plus 3.15% in respect of each Prime Rate Loan under the Demand NRT Facility.

All other terms of the SARCA, as amended, remain in full force and effect.

The Company also announces that it has issued deferred share units ("DSUs") to its directors as of November 18, 2024. Under the Company's DSU Plan, an aggregate of 184,374 DSUs have been issued by the Company to non-executive directors in settlement of $44,250.00 of deferred directors' compensation. The DSUs are to be settled in common shares of the Company when the respective director retires from all positions with the Company.

About Diamond Estates Wines and Spirits Inc.

Diamond Estates Wines and Spirits Inc. is a producer of high-quality wines and ciders as well as a sales agent for over 120 beverage alcohol brands across Canada. The Company operates four production facilities, three in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, Creekside, D'Ont Poke the Bear, EastDell, Lakeview Cellars, Mindful, Shiny Apple Cider, Fresh Wines, Red Tractor, Seasons, Serenity and Backyard Vineyards.

Through its commercial division, Trajectory Beverage Partners, the Company is the sales agent for many leading international brands in all regions of the country as well as being a distributor in the western provinces. These recognizable brands include Fat Bastard, Meffre, Pierre Chavin and Andre Lurton wines from France, Brimincourt Champagne from France, Merlet and Larsen Cognacs from France, Kaiken wines from Argentina, Blue Nun and Erben wines from Germany, Calabria Family Estate Wines and McWilliams Wines from Australia, Saint Clair Family Estate Wines and Yealands Family Wines from New Zealand, Storywood and Cofradia Tequilas from Mexico, Maverick Distillery spirits (including Tag Vodka and Barnburner Whisky) from Ontario, Talamonti and Cielo wines from Italy, Catedral and Cabeca de Toiro wines from Portugal, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies from Scotland, Islay Mist, Grand MacNish and Waterproof whiskies from Scotland, C. Mondavi & Family wines including C.K Mondavi & Charles Krug from Napa and Hounds Vodka from Canada, Bols Vodka from Amsterdam, Koyle Family Wines from Chile, Pearse Lyons whiskies and gins from Ireland and McCormick Distilling International including Tequila Rose Strawberry Cream, Five Farms Irish Cream Liqueur, Broker's Gin, Hussong's Tequila, Tarantula Tequila, 360 Vodka and Holliday Bourbon.

For more information, please contact:

Andrew Howard 
President & CEO
Diamond Estates Wines & Spirits Inc.
ahoward@diamondwines.com

Ryan Conte, CPA, CA, CBV
Chief Financial Officer
Diamond Estates Wines & Spirits Inc.
rconte@diamondwines.com

Forward-Looking Statements

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Diamond Estates Wines and Spirits Inc. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the economy generally; consumer interest in the services and products of the Company; financing; competition; and anticipated and unanticipated costs. While the Company acknowledges that subsequent events and developments may cause its views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the views of the Company as of any date subsequent to the date of this press release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/230959

FAQ

What are the key terms of Diamond Estates' Third Amendment with BMO?

The amendment includes a new $2.5M non-revolving credit facility, reduction of existing facility to $2.98M, Lassonde Industries guarantee, and adjusted interest rates.

How much was Diamond Estates' (DWWEF) credit facility reduced?

The non-revolving term credit facility was reduced from $8.673 million to $2.982 million.

When does Diamond Estates' new credit facility mature?

The new Demand NRT Facility matures on the earlier of BMO's demand, receipt of 2025 VQA rebate, full prepayment, or July 31, 2025.

How many DSUs did Diamond Estates issue to directors in November 2024?

Diamond Estates issued 184,374 DSUs to non-executive directors, worth $44,250.00.