Note 10 - Debt

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

The below table presents details of the Company's debt:

	As of March 31, 2023		As of December 31, 2022
Short term debt
Working capital facilities		14,878		14,267
Current portion of long term debt
Current maturity of term loan		48,000		119,194
Current maturity of equipment loan		854		1,272
Total		63,732		134,733
Long term debt
Term loan, net of debt issuance costs		66,943		41,175
Total		66,943		41,175

Term Loan and working capital facilities

The Company has a number of working capital facilities in various countries in which it operates. These facilities provide for a combined borrowing capacity of approximately $28 million for a number of working capital products. These facilities bear interest at benchmark rate plus margins between 2.0% and 4.5% and are due on demand. These facilities are collateralized by various company assets and have a total outstanding balance of $14.8 million as of March 31, 2023.

Under the Senior debt arrangement, the Company has secured term loan of $165 million. Under the arrangement, the term loan will bear a tiered interest rate and will range between LIBOR plus 375 to 450 basis points, subject to certain financial ratios. The Company is required to meet these financial ratios on a quarterly basis. As of March 31, 2023, the Company was in compliance with all financial covenants. The Adjusted Leverage (total net debt / adjusted EBITDA) in respect of the most recently completed relevant period was less than 2.25, hence the applicable margin was set at 375 basis points. 

On January 10, 2023, the Company has made a prepayment of $41.3 million against senior debt by utilising the proceeds received from redemption of interest in CSS Corp LP, according to clause 8.3 of the facilities agreement, in addition to the scheduled installment of $4.1 million, thus totaling to $45.4 million during the quarter.

On April 3, 2023, an indirect subsidiary of the Company completed its previously announced sale of the Company’s indirect 51 percent ownership interest in CCC to Solutions. In accordance with the requirements of the facilities agreement, the Company was required to apply the proceeds received from the CCC disposal towards prepayment of the Company’s senior term loan facility. Gross proceeds received were $68.9 million. Which is subject to true up working capital adjustments and tax payable on the transaction.

The Company had filed a consent request with the lenders under its facilities agreement relating to the application of $55 million of the proceeds arising out of the Company's disposal of its ownership interest in CCC, which was accepted by the lenders on April 19, 2023. As per the accepted consent request, the proceeds received pursuant to the disposal of CCC will be utilised in the following order of priority: (i) firstly, prepayment of the outstanding Revolving Facility Loans of an amount of $7 million (together with accrued and unpaid interest then outstanding on the Revolving Facility Loans), (ii) secondly, (in relation to the Term Loans) prepayment in full of the four (4) Repayment Instalments which would otherwise fall due on May 22, 2023, August 22, 2023, November 22, 2023 and February 22, 2024 (together with accrued and unpaid interest then outstanding on the Term Loans), and (iii) lastly, (in relation to the Term Loans) the balance proceeds from the CCC disposal to be applied against the remaining eight (8) repayment instalments on a pro rata basis. 

In April 2023, the Company has applied $55 million of the proceeds in making a prepayment of $48 million against the senior debt and $7 million against the revolving credit facilities.  

Accordingly, senior term loan principal repayment schedule has been revised as below:

Years	Amount
Remainder of 2023*		48,000
2024		18,403
2025		42,940
2026		6,067
Total		115,410

* Paid on April 21, 2023

Debt issuance cost represents the amount paid to the Company’s counsel and other third parties and was being amortized over the period of the new term loan. 

Following table presents the changes in debt issuance cost during the three months ended March 31, 2023 and the year ended December 31, 2022:

	March 31, 2023			December 31, 2022
Opening balance		507			2,332
Less: Amortization of debt issuance cost*		(40	)		(1,825	)
Closing balance		467			507

*includes one time amortisation of $1,260 during period ended December 31, 2022.

Equipment Loan

On November 2, 2020, the Company executed Master Equipment Finance Agreement to finance purchase of equipment for $4 million at the interest of 5.27% per annum with a maturity date 34 months after the date of first utilization of equipment loan. The amounts outstanding as at March 31, 2023 is $0.9 million.

Non-recourse factoring

We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. Under the arrangement, the Company sells the trade receivables on a non-recourse basis and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company's consolidated balance sheet when the Company receives the cash proceeds. We do not service any factored accounts after the factoring has occurred. We utilize factoring arrangements as part of our financing for working capital. The balance of funds received from factored receivables under these agreements was 17.5 million and 18.09 million as of March 31, 2023 and December 31, 2022 respectively.