In its recently 8K filing with the SEC, FuelCell Energy announced that it has fully paid its debt of $87M to Orion. At the same time, Orion exercised its option of FCEL for a gain of $653K for FuelCell Energy.
Below follows the filing;
Item 1.02. Termination of a Material Definitive Agreement.
As previously disclosed, on October 31, 2019, FuelCell Energy, Inc. (the “Company”) and certain of its subsidiaries as guarantors entered into a Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Orion Credit Agreement”) with Orion Energy Partners Investment Agent, LLC, as Administrative Agent and Collateral Agent (the “Orion Agent”), and certain lenders affiliated with the Orion Agent for a $200.0 million senior secured credit facility (the “Orion Facility”), structured as a delayed draw term loan to be provided by the lenders primarily to fund certain of the Company’s construction and related costs for fuel cell projects which meet the requirements of the Orion Facility. The Orion Credit Agreement was amended on November 22, 2019, January 20, 2020, February 11, 2020, April 30, 2020, and June 8, 2020. The Orion Agent’s affiliated lenders under the Orion Credit Agreement are Orion Energy Credit Opportunities Fund II, L.P., Orion Energy Credit Opportunities Fund II PV, L.P., Orion Energy Credit Opportunities Fund II GPFA, L.P. and Orion
Energy Credit Opportunities FuelCell Co-Invest, L.P. (the “Lenders”).
Also as previously disclosed, on November 30, 2020, the Company, its subsidiary guarantors, and the Orion Agent entered into a payoff letter with respect to the Orion Credit Agreement (the “Payoff Letter”) pursuant to which, on December 7, 2020, the Company paid off its indebtedness to the Orion Agent and the Lenders and thereby terminated the Orion Credit Agreement and the Orion Facility.
Pursuant to the Payoff Letter, the Company paid, on December 7, 2020, a total of $87,349,084.54 to the Orion Agent, representing the outstanding principal, accrued but unpaid interest, prepayment premium, fees, costs and other expenses due and owing to the Orion Agent and the Lenders under the Orion Facility and the Orion Credit Agreement and related loan documents, in repayment of the Company’s outstanding indebtedness under the Orion Facility and the Orion Credit Agreement and related loan documents. In accordance with the Payoff Letter, the aggregate prepayment premium set forth in the Orion Credit.
Agreement was reduced from approximately $14.9 million to $4 million and the Orion Agent, on behalf of itself and the Lenders, agreed that any portion of the prepayment premium that would otherwise be required to be paid pursuant to the Orion Credit Agreement in excess of $4 million was waived by the Orion Agent and the Lenders.
Concurrently with the Orion Agent’s receipt of full payment pursuant to the Payoff Letter, the Orion Agent released all of the collateral from the liens under the security documents and the Company and its subsidiaries were unconditionally released from their respective obligations under the Orion Credit Agreement (and related loan documents) and the Orion Facility without further action. With the termination of the Orion Credit Facility and the Orion Credit Agreement and related loan documents, the Lenders no longer have the right to appoint representatives to attend the Company’s Board of Director meetings as observers.
The foregoing description of the Payoff Letter is qualified in its entirety by reference to the Payoff Letter, a copy of which was previously filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on December 1, 2020.
Item 8.01. Other Events.
On December 7, 2020, the Lenders exercised certain of the warrants issued to them on November 22, 2019, pursuant to the Orion Credit Agreement by the Company to purchase a total of 2,700,000 shares of the Company’s common stock for an aggregate exercise price of $653,400 (or $0.242 per share). Following this warrant exercise, the Lenders no longer hold any warrants to purchase shares of the Company’s common stock.