Power Solutions International Secures New Credit Arrangements
Power Solutions International Secures New Credit Agreements
Power Solutions International, Inc. (PSI) has recently announced the closing of a new revolving credit agreement with Standard Chartered Bank, allowing the company to borrow up to $120 million. This significant move marks a strategic step towards enhancing its financial flexibility and operational capacity.
Details of the Credit Agreement
The new credit facility has favorable terms, enabling PSI to access funding at a lower interest rate compared to previous agreements. The credit line is set to expire on a specified date in 2025, providing the company with a reliable financial resource to support its operations and growth.
Initial Draw and Repayment Strategy
Upon closing the agreement, PSI made an initial draw of $100 million. This amount is earmarked for important financial maneuvers, including repaying approximately $40 million to settle existing obligations and alleviating around $60 million associated with previous shareholder loan agreements with its majority stakeholder, Weichai America Corp.
Strategic Importance of the New Loans
This new credit arrangement is strategically vital for PSI as it positions the company for future growth. The funds will provide necessary capital to support various projects and initiatives, allowing the firm to remain competitive within the power solutions sector.
Subordinated Shareholder Loan Agreement
In conjunction with the credit agreement, PSI has also secured a new shareholder loan agreement with Weichai, which permits the company to borrow up to $105 million. Although this loan is subordinate to the credit agreement, it provides an additional buffer of financial support.
About Power Solutions International
Power Solutions International, Inc. is recognized as a leader in designing and manufacturing advanced engines and power systems that comply with emission standards. Their innovative solutions cater to a diverse range of original equipment manufacturers and end-users across several industries, including transportation and industrial applications. PSI's robust capabilities in design and engineering allow the customization of engines to operate on various fuels such as natural gas, diesel, and biofuels.
Global Presence and Product Range
PSI delivers complete power systems that are utilized globally in various applications, including stationary and mobile power generation, as well as in industrial machinery. Their adaptability and engineering prowess enable them to serve multiple markets effectively, from agricultural vehicles to construction equipment.
Frequently Asked Questions
What is the significance of the new credit agreement for PSI?
The credit agreement enhances PSI's financial flexibility, allowing it to borrow at a lower interest rate and access capital for growth initiatives.
How much can PSI borrow under the new shareholder loan agreement?
PSI can borrow up to $105 million under the new shareholder loan agreement with Weichai, which will support its operational needs.
What does PSI specialize in?
PSI specializes in the design and manufacture of emission-certified engines and power systems for various industrial and transportation applications.
When does the new credit agreement expire?
The new credit agreement is set to expire in 2025, giving PSI a significant timeframe to utilize its financial resources effectively.
What types of fuels do PSI engines operate on?
PSI engines are designed to be fuel agnostic, operating on natural gas, propane, diesel, gasoline, and biofuels, making them versatile for various applications.
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