Spark Power Provides Corporate Update

Rhea-AI Summary

Spark Power Group is in advanced negotiations with Bank of Montreal to amend its credit facility, with terms expected to be finalized around November 15, 2022. The amended agreement will include an extended maturity date to September 30, 2024, reduced quarterly principal payments, and reestablished traditional financial covenants. Spark Power anticipates these changes will improve liquidity and provide operational flexibility. The company reports positive momentum in margin realization and cost structure improvements, expecting continued performance gains into Q3 2022.

Positive

• Expectations of improved liquidity and operational flexibility following the amendment of the credit facility.
• Extended maturity date of the credit facility to September 30, 2024.
• Reduced quarterly principal payments to $1,125,000 starting in Q4 2022.
• Positive momentum in revenue mix and margin performance reported, with ongoing integration work nearing completion.

Negative

• Ongoing market challenges impacting business performance.
• No assurance that Bank of Montreal will consent to the transaction or agree on final terms of the amended credit facility.

IN ADVANCED NEGOTIATIONS WITH ITS SENIOR LENDER TO AMEND ITS CREDIT FACILITY

OAKVILLE, ON / ACCESSWIRE / October 31, 2022 / Spark Power Group Inc. ("Spark Power" or the "Company") (TSX:SPG) is pleased to provide the following corporate update.

Financial

The Company continues to execute its plans to improve margin realization and reset its cost structure. The work to accelerate the integration of the business is largely complete and the positive momentum and performance gains realized in the second quarter are expected to continue through the third quarter and for the balance of the year.

"While we continue to navigate the ongoing market challenges, I am pleased with the internal focus across our organization on the performance improvement initiatives and the #onespark integration", said Richard Jackson, President & CEO of Spark Power. "As a result of the team's hard work and laser focus, we are seeing a better revenue mix and improved margin performance. We are closing in on achieving our integration plan resulting in significant reductions in SG&A costs and readying the platform for the execution of our new growth plan that is in the final stages of launch", added Jackson.

Capital

The Company is pleased to announce today that it is in advanced negotiations with its senior lender, Bank of Montreal ("BMO"), on the terms of an amended and restated credit facility (the "Amended Credit Facility"). It is anticipated that the Amended Credit Facility will include a path to Spark Power reverting to traditional financial covenants at the end of Q1 2023, and additionally the Amended Credit Facility is expected to include the following material terms:

• Maturity Date extended to September 30, 2024
• Term Loan amortization period extended, and quarterly principal payments reduced to $1,125,000 effective for the Q4 2022 principal repayment due January 3, 2023
• Reestablishing traditional financial covenants, Senior Debt to EBITDA Ratio, minimum Fixed Coverage Ratio and Total Debt to EBITDA ratio
• Decreased interest rate margin on facility advances on adoption of traditional financial covenants
• Application of the proceeds of the Bullfrog sale to the Term Debt and Operating Facility

Richard Perri, Executive Vice President & Chief Financial Officer of Spark Power, stated, "We are pleased to continue to work with BMO on this amendment to our lending agreement. As Spark Power remains on track with its recovery from the effects of the pandemic and rising costs of inflation that impacted the Company in 2021 and early 2022, this amendment will provide us with additional liquidity and operating flexibility to meet the needs of the business in its next stage of growth and maturity. BMO continues to be an ardent supporter and great partner to Spark Power, and we appreciate their unwavering support throughout this challenging period."

Spark Power anticipates that the terms of the Amended Credit Facility will be finalized, and the agreement signed concurrent with the closing of the sale of its Bullfrog Power Inc. business unit ("Bullfrog"), which is expected to occur on or about November 15, 2022. The binding agreement to sell Bullfrog to a third-party buyer (the "Transaction") was announced by the Company on Friday, October 28 in a separate news release. The Company cautions that there can be no assurance that BMO will consent to the Transaction, that the Company and BMO will agree on the final terms of the Amended Credit Facility or that the Transaction will close.

Upon signing, the Amended Credit Facility will be made available under the Company's profile on SEDAR at www.sedar.com.

About Spark Power Group Inc.

Spark Power, a wholly owned subsidiary of Spark Power Group Inc. (TSX: SPG), is a leading independent provider of end-to-end electrical contracting, operations and maintenance services, and energy sustainability solutions to the industrial, commercial, utility, and renewable asset markets in North America. We work to earn the right to be our customers' Trusted Partner in Power™. Our highly skilled and dedicated people, located in the communities we serve, combined with our knowledge of the power industry, technology expertise, and commitment to safety, ensures we deliver the right solutions that keep our customers' operations up and running today and better equipped for tomorrow. Learn more at www.sparkpowercorp.com.

Investor and Regulatory Inquiries:
Richard Perri, Executive Vice President & Chief Financial Officer
richard.perri@sparkpowercorp.com
+1 (905) 829-3336

Media Inquiries:
April Currey, VP, Sales & Marketing
media@sparkpowercorp.com
+1 (365) 228-1023

Forward-Looking Statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) which reflect Spark Power's current expectations regarding future events. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", and other similar expressions. The forward-looking statements in this press release include statements regarding the expectation of the Company to receive the approval of its lender, the Company's future growth and availability of capital to execute on the Company's growth and integration plan, the anticipation that the Amended Credit Facility will include a path to Spark Power reverting to traditional financial covenants at the end of Q1 2023, the expected material terms of the Amended Credit Facility and the anticipated timeline to finalize and sign the Amended Credit Facility concurrent with the closing of the sale of the Company's Bullfrog Power Inc. business unit ("Bullfrog") on or about November 15, 2022. The forward-looking statements in this news release are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Several factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Such factors include, among others: currency fluctuations; disruptions or changes in the credit or security markets; results of operations; and general developments, market and industry conditions, and those risks disclosed in the Company's annual information form for the year ended December 31, 2021 available on the Company's profile at www.sedar.com. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, Spark Power assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE: Spark Power Group Inc.

View source version on accesswire.com:
https://www.accesswire.com/723035/Spark-Power-Provides-Corporate-Update

FAQ

What is the current status of Spark Power's credit facility negotiations with BMO?

Spark Power is in advanced negotiations with Bank of Montreal to amend its credit facility expected to be finalized around November 15, 2022.

What are the expected terms of Spark Power's amended credit facility?

The amended credit facility is expected to include an extended maturity date to September 30, 2024, reduced quarterly principal payments, and the reestablishment of traditional financial covenants.

How does the credit facility amendment impact Spark Power's financial situation?

The amendment is anticipated to improve liquidity and provide operational flexibility, aiding the company's recovery and growth plans.

What performance gains has Spark Power reported?

Spark Power has reported positive momentum in margin realization and improvements in revenue mix, with expectations of continued performance gains into Q3 2022.

What risks are associated with the credit facility amendment?

There is no assurance that BMO will consent to the transaction or that the final terms of the amended credit facility will be agreed upon.