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Subsequent Event
12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
Subsequent Event

NOTE 21 – Subsequent Event

On January 22, 2021, Diodes Hong Kong Limited (the “Borrower”), a company incorporated under the laws of Hong Kong and a subsidiary of Diodes Incorporated (“Diodes Incorporated”), entered into a Facility Agreement (the “Facility Agreement”) with The Hongkong and Shanghai Banking Corporation Limited, as Arranger (the “Arranger”), the financial institutions listed in Schedule 1 thereto, The Hongkong and Shanghai Banking Corporation Limited, as Agent, and The Hongkong and Shanghai Banking Corporation Limited, as Security Agent (the “Security Agent”).  In addition, on January 22, 2021, the Borrower entered into a Hong Kong Debenture (the “Debenture”) with the Security Agent.  In connection with the Facility Agreement and the Debenture, Diodes Incorporated executed a letter of awareness for the benefit of the Hongkong and Shanghai Banking Corporation Limited (the “Letter of Awareness”).  Certain capitalized terms used in the following description of the Facility Agreement have the meanings given to them in the Facility Agreement. Certain capitalized terms used in the following description of the Debenture have the meanings given to them in the Debenture.

Pursuant to the Facility Agreement, the Lenders agreed to make available to the Borrower a US Dollar revolving loan facility in an aggregate amount equal to $100,000,000.  The interest rate on Loans made under the Facility will be the sum of the Margin and LIBOR.  The Margin is equal to 1.25%, in the event the Consolidated Leverage Ratio is less than 1.50:1.  The Margin increases, on a sliding scale, as the Consolidated Leverage Ratio increases up to a maximum of 2.25% if the Consolidated Leverage Ratio is greater than 3.00:1.  The Non-utilisation Fee payable on the undrawn and uncancelled amount of each Lender’s Commitment under the Facility is also dependent upon the Consolidated Leverage Ratio.  The Non-utilisation Fee is 0.15% if the Consolidated Leverage Ratio is less than 1.50:1.  The Non-utilisation Fee increases, on a sliding scale, as the Consolidated Leverage Ratio increases up to a maximum of 0.35% if the Consolidated Leverage Ratio is greater than or equal to 3.00:1.

The Facility matures on January 22, 2023 (the “Final Repayment Date”).  The Availability Period extends from January 22, 2021 through December 22, 2022.  Unutilized Commitments will be cancelled at 5 p.m. on the last day of the Availability Period.  The Borrower will be able to borrow funds under the Facility on a revolving basis during the Availability Period, however, all borrowed amounts must be repaid on or prior to the Final Repayment Date unless the Facility is extended or refinanced.  Neither Diodes Incorporated nor the Borrower can provide any assurances regarding whether the Facility will be extended or refinanced or the terms of any such hypothetical future extension or refinancing.  The Borrower plans to use a portion of the proceeds available under the Facility (i) to refinance certain existing indebtedness of the Borrower and (ii) to finance its working capital requirements and its general corporate purposes.

The Facility Agreement contains certain financial and non-financial covenants, including, but not limited to, a maximum Leverage Ratio, a minimum Tangible Net Worth, a minimum Interest Cover Ratio, and restrictions on payments of dividends (solely if

at the time of, or as a result of, such declaration or payment, an Event of Default is continuing or would occur).  The Facility Agreement is governed by the laws of Hong Kong.

Pursuant to the Debenture, the Borrower granted to the Security Agent, on behalf of itself and the other Secured Parties, a security interest over all present and future Security Assets of the Borrower.  The security interest is continuing security for the payment, discharge and performance of all of the Secured Liabilities, which includes the Borrower’s payment obligations under the Facility Agreement.  The Debenture is governed by the laws of Hong Kong.

Pursuant to the Letter of Awareness, Diodes Incorporated agreed, among other things, to notify the Arranger in the event of any decision being taken to dispose of the whole or any part of Diodes Incorporated’s shareholding in the Borrower.  The Letter of Awareness is interpreted according to Hong Kong law.