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) November 30, 2011
Vitran Corporation Inc.
(Exact name of registrant as specified in its charter)
ONTARIO, CANADA | 001-32449 | 98-0358363 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
185 The West Mall, Suite 701, Toronto, Ontario, Canada |
M9C 5L5 | |||
(Address of principal executive offices) | (Zip code) |
(Registrants telephone number, including area code) 416-596-7664
Not Applicable
Former name or former address, if changed since last report
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:
¨ | 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 1.01 | Entry into a Material Definitive Agreement |
(1) | On November 30, 2011, Vitran Corporation Inc. (the Company) and certain of its subsidiaries entered into a Credit Agreement (the Credit Agreement) for a revolving credit facility led by JPMorgan Chase Bank, N.A., as agent (the Agent), and other lenders that are parties thereto (the Lending Group). |
The following is a summary of the material terms of the Credit Agreement:
| The Credit Agreement is for an asset-based revolving credit facility with a total bank commitment of $85 million. The total available borrowing capacity is based on a borrowing base calculation on the Companys eligible accounts receivable. The tenure of the Credit Agreement is 3-years expiring on November 30, 2014. |
| The facility is secured by accounts receivable and certain equipment of the Company. |
| The Credit Agreement allows the Company to increase total commitments by $30 million under an accordion feature. |
| The Company has restrictions on the total amount of additional balance sheet debt it can incur. |
| A fixed charge ratio of greater than 1.10 to 1 must be measured monthly if available borrowing capacity falls below a certain threshold for three consecutive days. Cash dominion and weekly reporting would also be triggered. |
| Interest rate margins on borrowings are based on the amount of available borrowing capacity and ranges from 225 basis points to 275 basis points. There is no interest rate floor in the agreement. |
(2) | On November 30, 2011, the Company and certain of its subsidiaries entered into real estate term agreement with a real estate mortgage lender. |
The following is a summary of the material terms of the real estate term agreement:
| The real estate term agreement is for a total of CAD$45.7 million as a first freehold mortgage on the land and buildings. The tenure of the agreement is seven years and the amortization period is twenty-five years. |
| The real estate term is secured by a first mortgage on the four owned Canadian transportation facilities in Vancouver, BC; Edmonton, Alberta; Toronto, Ontario; and Montreal, Quebec |
| The interest rate is fixed at 4.75% for the term of the real estate agreement. |
FD Disclosure
On December 01, 2011 the Registrant issued the attached news release entitled Vitran Completes Refinancing of Senior Credit Facilities announcing that it has entered into the Credit Agreement and real estate term agreement described in Item 1.01 of this Report. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Report, including the exhibits attached hereto which are incorporated herein by reference, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. |
The following exhibits are attached to this Current Report on Form 8-K:
Exhibit No. |
Description | |
99.1 | News Release dated December 01, 2011. (1) |
(1) | Filed as an exhibit hereto |
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, thereunto duly authorized.
VITRAN CORPORATION INC. | ||||
By: | /s/ Fayaz D. Suleman | |||
Name: | Fayaz D. Suleman | |||
Date: December 5, 2011 | Title: | Vice President Finance and Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description | |
99.1 | News Release dated December 01, 2011. (1) |
(1) | Filed as an exhibit hereto |
Exhibit 99.1
![]() |
News Announcement
|
CONTACT:
Richard Gaetz, President/CEO
Fayaz Suleman, VP Finance/CFO
Vitran Corporation Inc.
416/596-7664
FOR IMMEDIATE RELEASE
VITRAN COMPLETES REFINANCING OF SENIOR CREDIT FACILITIES
TORONTO, ONTARIO (December 1, 2011) Vitran Corporation Inc. (NASDAQ: VTNC, TSX: VTN), a North American transportation and supply chain firm, today announced that it has signed and closed the two previously-announced credit agreements, replacing the current credit agreement which was due to expire in 2012. Vitran signed a new, three-year bank agreement with a four-bank syndicate led by JPMorgan Chase Bank, for an asset-based revolving credit facility to provide up to $85 million. Vitran also signed a new $45.7 million seven-year real estate term credit facility secured by Vitrans four Canadian LTL transportation facilities.
Under the agreements, Vitran:
| Increased liquidity and improved the terms and conditions with a new debt structure that provides Vitran additional flexibility to invest in its business |
| Reduced interest rate spreads under the new revolving credit facility for LIBOR and Canadian BA-rated loans by a minimum of 125 basis points |
| Extracted substantial value from its Canadian real estate in the form of a seven-year term facility at a fixed rate of 475 basis points |
| Created additional borrowing capacity under the new revolving credit facility as Vitrans business continues to grow. |
Vitran President and Chief Executive Officer Rick Gaetz stated, We look forward to our continued partnership with JPMorgan and our new real estate lender. We are extremely pleased to have positioned Vitran with the flexibility to continue to execute our operating plan. In addition we reduced our blended all-in interest rate to approximately 3.75% at current interest rates.
Vitran Corporation, 12/01/11 | page 2 of 2 |
New SCO Distribution Facility
Vitran also announced today its Supply Chain Operation will be opening a new Dedicated Distribution Center in Tacoma, Washington effective April, 2012. We are excited with our continued expansion on the West coast of the United States. Our management team continues its positive momentum from 2011 as we build the Vitran Supply Chain brand, concluded Mr. Gaetz.
About Vitran Corporation Inc.
Vitran Corporation Inc. is a North American group of transportation companies offering less-than-truckload and supply chain services. To find out more about Vitran Corporation Inc. (NASDAQ:VTNC, TSX:VTN), visit the website at www.vitran.com.
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Forward-looking statements may be generally identifiable by use of the words believe, anticipate, intend, estimate, expect, project, may, plans, continue, will, focus should endeavor or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on current expectations and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Vitrans actual results, performance or achievements to differ materially from those projected in the forward-looking statements. Factors that may cause such differences include, but are not limited to, technological change, increases in fuel costs, regulatory changes, the general health of the economy, seasonal fluctuations, unanticipated changes in railroad capacities, exposure to credit risks, changes in labour relations and competitive factors. More detailed information about these and other factors is included in the annual MD&A on Form 10K under the heading General Risks and Uncertainties. Many of these factors are beyond the Companys control; therefore, future events may vary substantially from what the Company currently foresees. You should not place undue reliance on such forward-looking statements. Vitran Corporation Inc. does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.
# # #
,OK:
M2GY<.E>?!I_