UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2015
AMERICAN ELECTRIC TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Florida | 000-24575 | 59-3410234 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
1250 Wood Branch Park Drive, Suite 600, Houston, TX | 77079 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 713-644-8182
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.02 Termination of a Material Definitive Agreement.
Simultaneously with the execution of the Loan Agreement with Frost Bank, the Companys credit agreements with JPMorgan Chase NA were terminated and all outstanding principal and interest were paid.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On December 29, 2015, American Electric Technologies, Inc. (the Company), entered into a Loan Agreement (the Loan Agreement) with Frost Bank (Frost). The Loan Agreement provides two revolving credit facilities to the Company. The first facility (Facility A) provides the Company with a $4.0 million revolving line of credit with a two-year term, subject to a maximum loan amount (the Borrowing Base) based on a formula related the value of certain of the Companys accounts, inventories and equipment. The Company may borrow, repay and reborrow, under Facility A, but not in excess of the Borrowing Base, until December 29, 2017, when all outstanding principal and accrued interest becomes due and payable. The Company borrowed $1.04 million under Facility A upon initiation of the Loan Agreement.
The second facility (Facility B) provides the Company with a $4.5 million declining revolving line of credit which may be borrowed, repaid and reborrowed with a maturity date of December 29, 2020 when all outstanding principal and accrued interest becomes due and payable. The amount available to borrow under Facility B declines from the initial $4.5 million by $150,000 each six months and any amount borrowed in excess of the reduced borrowing amount available will be immediately repaid upon such reduction date. The Company borrowed $4.5 million under Facility B upon initiation of the Loan Agreement.
The Companys obligations under Facility A are secured by:
1. All our accounts receivable of borrower, whether now owned or hereafter acquired.
2. All our inventory, whether now owned or hereafter acquired.
3. All our machinery and equipment, whether now owned or hereafter acquired.
4. All future distributions from joint ventures.
The Companys obligations under Facility B are secured by:
1. Our fee simple interest in certain real estate and improvements in Beaumont, Texas.
2. Any parking, utility and ingress/egress easements on the foregoing property.
3. A collateral assignment on all future distributions from joint ventures.
The Companys subsidiaries, M&I Electric Industries, Inc. and South Coast Electric are additional obligors on the Loan Agreement.
The Loan Agreement contains representations and affirmative, negative and financial covenants usual and customary for agreements of this type, including maximum debt to tangible net worth and free cash flow to debt service at the end of each fiscal quarter, and covenants that place conditions upon the Companys ability to merge or consolidate with other companies, sell any material part of its business or property, incur liens and pay dividends.
The foregoing description of the Loan Agreement is qualified in its entirety by reference to the definitive Loan Agreement filed as an exhibit to this Current Report on Form 8-K and incorporated herein by this reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 | Loan Agreement between Registrant and Frost Bank dated December 29, 2015. (To filed by Amendment) | |
Exhibit 99.1 | Press Release dated January 5, 2016 announcing the Registrants Loan Agreement with Frost Bank. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN ELECTRIC TECHNOLOGIES, INC. | ||||||
Date: January 6, 2016 | By: | /s/ Charles M. Dauber | ||||
Charles M. Dauber | ||||||
President and CEO |
Exhibit 99.1
American Electric Technologies, Inc 1250 Wood Branch Park Houston, Texas 77079 713.644.8182 |
AETI announces new $8.5 Million Credit Facility
New relationship with Frost Bank facilitates Companys global growth strategy
HOUSTON, Tex. January 5, 2016 American Electric Technologies Inc. (Nasdaq: AETI), a leading provider of power delivery solutions for the global energy industry, announced today the Company has entered into a new $8.5 million credit facility (Credit Facility) with Frost Bank of Texas.
The new Credit Facility consists of a $4.0 million revolving line of credit with a two-year term and a $4.5 million declining revolving line of credit.
This new Credit Facility with Frost Bank provides us the liquidity and the flexibility to execute our growth strategy in the oil and natural gas and power generation and distribution sectors of the energy industry said Bill Brod, AETIs Senior Vice President and Chief Financial Officer.
We are pleased to work with the AETI management team as they execute their growth strategy, said Michael Aubuchon, Frost Banks Market President. Frost Bank has helped Texas businesses and manufacturing clients with their financial needs for 148 years. This new AETI facility is a great example of the flexibility that we provide to our clients.
This Credit Facility replaces the Companys prior credit facility with another bank which was scheduled to mature on December 31, 2015.
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American Electric Technologies, Inc. (NASDAQ: AETI) is a leading provider of power delivery solutions for the global energy industry. AETI offers M&I Electric power distribution and power conversion products, control and automation systems, Power Distribution Centers (PDCs) and E&I services. South Coast Electric Systems L.L.C., a subsidiary, services Gulf Coast marine and vessel customers.
AETI is headquartered in Houston and has global operations in Beaumont, Texas; Bay St. Louis, Mississippi, and Rio de Janeiro and Macae, Brazil. In addition, AETI has minority interests in two joint ventures, which have facilities located in Xian, China and Singapore. AETIs SEC filings, news and product/service information are available at www.aeti.com.
Investor Contacts:
American Electric Technologies, Inc.
Bill Brod
713-644-8182
investorrelations@aeti.com