FP Newspapers Inc. Announces Amendment of Term Loan and Non-Revolving Credit Facility

Rhea-AI Summary

FP Newspapers Inc. announced the amendment of a credit facility with HSBC Bank Canada, extending a new credit facility of up to $15,585,000. The facility will mature on July 6, 2026, with a variable interest rate. This financing is directed towards refinancing existing debts and funding upcoming equipment acquisitions. FP Newspapers owns 49% of the distributable cash flow of its subsidiary, FP Canadian Newspapers Limited Partnership, which operates the Winnipeg Free Press and other media outlets.

Positive

• New credit facility of up to $15,585,000 secured with HSBC Bank Canada.
• Credit facility allows for refinancing existing debts and financing equipment acquisitions.
• HSBC has a long-term relationship with FP Newspapers, reflecting trust and stability.

Negative

• Dependence on debt repayments raises concerns regarding financial stability.
• The media industry faces ongoing challenges that could impact profitability.

WINNIPEG, MB / ACCESSWIRE / July 11, 2022 / FP Newspapers Inc. ("FPI" or the "Company") (TSXV:FP) is pleased to announce that FP Canadian Newspapers Limited Partnership ("FPLP") has entered into an amended and restated facility letter (the "Restated Facility Letter") whereby its existing facility letter dated January 21, 2020 with HSBC Bank Canada (the "Original Facility Letter") was amended. In connection with the Restated Facility Letter, HSBC Bank Canada has provided the Company with a credit facility of up to $15,585,000 (the "Credit Facility").

Under the terms of the Restated Facility Letter, the Credit Facility will mature on July 6, 2026 being four years from the date of the initial advance (the "Term") and bears a variable rate of interest at HSBC Bank Canada prime rate of interest per annum, plus a premium based on financial leverage as defined by HSBC Bank Canada. FPLP is obligated to make monthly installment payments of accrued interest payable on the principal outstanding until January 30, 2023 and repay $188,700 per month along with all accompanying interest for the remainder of the Term. The Restated Facility Letter contains substantially the same representations, warranties, covenants, events of default and financial covenants as the Original Facility Letter. The Credit Facility is secured by the assets of the businesses and a mortgage registered on FPLP's Winnipeg land and buildings, as provided for under the Original Facility Letter.

"HSBC Bank Canada has been a long-term supporter and valued business partner to the Company since they initially provided a $60.0 million loan facility over a decade ago," said Robert Silver, Chief Executive Officer, Chairman and President of FPI. "2022 marks the 150^th anniversary of the first publication of the Winnipeg Free Press and whilst news media as a whole faces evolving challenges, it plays a renewed and essential role in our society. The Company is making continued progress on FPLP's debt repayments, in no small part through the hard work of its dedicated employees."

The proceeds from the Restated Facility Letter are to be used to re-finance its current indebtedness and to finance the acquisition of planned equipment purchases.

FPLP owns and operates the Winnipeg Free Press, along with several other Manitoba-based news and media publications that are available in both print and digital formats. The informative and engaging content we produce has an extensive reach throughout the province of Manitoba. The breadth of our reach provides compelling platforms for those looking to effectively reach a Manitoba audience. FP Newspapers Inc. owns securities entitling it to 49% of the distributable cash flow of FPLP.

For further information please contact:

Ryan Kolaski, CFO
FP NEWSPAPERS INC.
Phone 204-771-1897

Caution Regarding Forward-Looking Statements

Certain statements in this news release may constitute forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include but are not limited to statements regarding management's intent, belief or current expectations with respect to market and general economic conditions, future costs and operating performance. Generally, but not always, forward-looking statements will be indicated by words such as "may", "will", "intend", "anticipate", "expect", "believe", "plan", "forecast", "is budgeting for" or similar terminology. Forward-looking statements are subject to known and unknown risks and uncertainties that may cause the actual results, performance or achievements of FPI or FPLP, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include FPLP's ability to make repayments under the Credit Facility, the continued sustainability of interest rates, FPLP's ability to effectively manage growth and maintain its profitability, FPLP's ability to operate in a highly competitive and challenging industry, FPLP's reliance upon key personnel, FPLP's indebtedness incurred in making acquisitions, the availability of financing for capital improvements, costs related to capital expenditures, cyclical and seasonal variations in FPLP's revenues and the risk of equipment failure. In addition, although the forward-looking statements contained in this news release are based upon assumptions that management of FPI and FPLP believe to be reasonable, such assumptions may prove to be incorrect. Forward-looking statements speak only as of the date hereof and, except as required by law, FPI and FPLP assume no obligation to update or revise them to reflect new events or circumstances. Because forward-looking statements are inherently uncertain, readers should not place undue reliance on them.

SOURCE: FP Newspapers Inc.

View source version on accesswire.com:
https://www.accesswire.com/708130/FP-Newspapers-Inc-Announces-Amendment-of-Term-Loan-and-Non-Revolving-Credit-Facility

FAQ

What is the new credit facility amount for FP Newspapers Inc. (FPNUF)?

FP Newspapers Inc. has secured a new credit facility of up to $15,585,000.

When does the amended credit facility mature for FP Newspapers (FPNUF)?

The amended credit facility matures on July 6, 2026.

What is the purpose of the credit facility for FP Newspapers Inc. (FPNUF)?

The proceeds are to refinance existing debts and finance planned equipment purchases.

How much of the distributable cash flow does FP Newspapers own in FPLP?

FP Newspapers owns 49% of the distributable cash flow of FP Canadian Newspapers Limited Partnership (FPLP).

What challenges does FP Newspapers Inc. (FPNUF) face in the media industry?

FP Newspapers faces ongoing challenges in the evolving media landscape which could affect profitability.