Dorel Finalizing Agreements to Recapitalize Its Balance Sheet Through New Credit Facilities and Issue of Preferred Shares

Core Viewpoint - Dorel Industries Inc. is finalizing new credit facilities and a private placement of preferred shares to strengthen its financial position and support restructuring efforts [1][2]. Financing Details - Dorel is securing up to $310 million in new credit facilities, which includes a $175 million revolving facility and a $135 million term loan, with a five-year term [4]. - The proceeds will be used to repay approximately $180 million of current senior secured debt, cover restructuring costs, and provide working capital [2]. Preferred Shares - Dorel will issue preferred shares to Alberta Investment Management Corporation (AIMCo) with an initial annual dividend yield of 17%, increasing by 1.5% on the third and fourth anniversaries, capped at 20% [5][6]. - The preferred shares will be redeemable under certain conditions, including a sale of Dorel or significant asset transfers [6]. Warrants Issuance - Dorel will issue warrants to lenders and AIMCo, representing 5% and 8% of the outstanding shares, respectively, with an exercise price of CAD $0.01 for seven years [7][8]. - The total number of warrants issued will be 4,881,261, representing 14.94% of Dorel's issued and outstanding shares [9]. Shareholder Approval - The issuance of warrants requires shareholder approval due to the significant discount from the current trading price, with written consents obtained from shareholders holding over 50% of the voting rights [10]. Regulatory Compliance - The securities issued will be subject to a four-month hold period under Canadian securities regulations [11]. Advisory Information - TD Securities Inc. is the exclusive financial advisor for the debt financing, while BMO Capital Markets is acting as a placement agent for the preferred shares [12]. Company Profile - Dorel Industries operates in juvenile products and home products, with annual sales of $1.3 billion and approximately 3,500 employees across 22 countries [13].