REG - Water Intelligence - $17 Million Expansion of Credit Facilities

Water IntelligenceAnnouncement

05/04/2022 07:00

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RNS Number : 2902H  Water Intelligence PLC  05 April 2022

Water Intelligence plc

$17 Million Expansion of Credit Facilities

Water Intelligence plc (AIM: WATR.L) ("Water Intelligence" or "Group"), a
leading multinational provider of precision, minimally-invasive, leak
detection and remediation solutions for both potable and non-potable water is
pleased to accelerate its multi-year growth plan with an expansion of its
credit facilities to include an additional $15 million for further
acquisitions of its American Leak Detection franchises ("ALOC") and a two-year
extension of its $2 million line for working capital ("WC") (together, "New
Facilities").

The New Facilities grow the Group's long-standing commercial banking
relationship with People's United Bank ("People's").  Today's transaction
also launches a broader relationship with People's new parent M&T Bank
Corp - a leading bank in the United States.

Capital Formation

The $17 million available from the New Facilities complements the Group's
£12.5 million (approximately $17 million) raised from an equity placement
during Q4 2021. Such capital formation combined with the Group's organic
growth in EBITDA, provides the Group with a strong base of resources from
which to accelerate its growth trajectory.

Transaction

Today's financing will facilitate continued accretive growth for all
shareholders because the ALOC provides $15 million of non-dilutive capital to
reacquire a portion of the approximately $100 million of profitable gross
sales currently being executed by franchisees within the Group's American Leak
Detection subsidiary.

As part of the facility, the Group has entered into a swap arrangement that
maintains a fixed interest rate of approximately 5.5% on amounts drawn under
the ALOC facility.  The amortization term on monthly principal and interest
repayment of monies drawn from the ALOC is five years. Separately, the
extension of the Group's working capital credit facility for an additional two
years provides the Group financing flexibility to expand its
business-to-business channels.  The WC will bear interest at a variable
interest rate based on 30-day SOFR. The New Facilities are in addition to the
Group's current bank debt, which at 31 December 2021 totalled $8.5 million.
The covenants for the New Facilities remain the same as disclosed on 6
December 2019 and 10 May 2019 for previous bank debt, including with both Dr.
Patrick DeSouza and PlainSight Systems, Inc. remaining as guarantors.

Dr. Patrick DeSouza, Executive Chairman of Water Intelligence, commented: "We
are pleased to deliver for shareholders an optimal corporate finance plan that
blends debt and equity to reinforce accelerated growth at a lower cost of
capital.  The expansion of our credit facilities and launch of a relationship
with M&T Bank, which has substantial additional capabilities, are very
exciting.  Today's bank transaction complements Q4's expansion of our
investor base with first-tier institutional funds.  We look forward to
continuing to deliver strong results despite the volatility that currently
characterizes the wider marketplace.  For the Group itself, market demand for
water infrastructure solutions continues to be strong."

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

Enquiries:

 Water Intelligence plc
 Patrick DeSouza, Executive Chairman               Tel: +1 203 654 5426
 RBC Capital Markets - Joint Broker                Tel: +44 (0)20 7653 4000

Jill Li

 Elizabeth Evans
 WH Ireland Limited - NOMAD & Joint Broker         Tel: +44 (0)20 7220 1666
 Chris Hardie
 Ben Good
                                                                   Tel:  +44 (0)20 3903 7715

 Dowgate Capital Ltd - Joint Broker

Stephen Norcross

 

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