PSI Secures Major $135 Million Credit Facility for Growth
Power Solutions International, Inc. Secures Major Funding
Power Solutions International, Inc. (“PSI” or the “Company”) has reached a pivotal financial milestone. Recently, the Company entered into a significant Second Amendment to its prior Uncommitted Revolving Credit Agreement with Standard Chartered Bank, along with participating lenders. This new agreement increases PSI’s borrowing capacity to an impressive $135 million, effectively positioning the Company for strategic growth and innovation in the coming years.
Financial Flexibility and Future Strategy
The newly amended credit facility, now extending through July 30, 2027, provides PSI with enhanced financial flexibility. Dino Xykis, CEO of PSI, expressed his enthusiasm, highlighting how this agreement reflects the confidence that financial partners have in their operational performance and long-term strategy. The robust capital structure, strengthened by support from world-class financial institutions, places PSI in a favorable position to deliver sustainable value for its diverse stakeholders.
Operational Efficiency and Profitability
During the announcement, Kenneth Li, the Chief Financial Officer, emphasized the company’s recent achievements. PSI has successfully generated positive cash flow from its operations and maintained profitability for several years. Furthermore, the company has amended its Revolving Long Term Credit Agreement, demonstrating its commitment to financial stability. The financial assessments reveal that PSI's existing cash and operational income are expected to sustain its business for at least another year, leading to a significant increase in net income due to the release of a valuation allowance against deferred tax assets.
Comprehensive Support for Business Operations
The Amended Credit Agreement includes customary covenants such as minimum interest coverage ratios and gross leverage ratios to ensure compliance and risk management. Borrowings under this agreement will incur interest based on the applicable Secured Overnight Financing Rate, with slight increases in rate contingent on ownership structure. The obligations secured by the credit agreement encompass a wide array of assets owned by PSI and its subsidiaries, providing an additional layer of financial security.
About Power Solutions International, Inc.
Founded as a leader in advanced engine manufacturing, Power Solutions International, Inc. specializes in the design and development of high-performance engines and power systems. The Company's unique capabilities allow it to deliver integrated solutions tailored to major global original equipment manufacturers and end-user customers across various industries, including power systems, industrial applications, and transportation.
Innovative Solutions for Diverse Markets
PSI’s offerings span various applications, producing emission-certified engine solutions that operate on multiple fuel types such as natural gas, propane, and diesel. The Company develops comprehensive power solutions used worldwide, supporting mobile and stationary power generation needs, and addressing the growing demand for energy solutions in data centers, among others. Additionally, PSI is committed to providing innovative powertrain technologies for specialized applications including military and construction vehicles.
Frequently Asked Questions
What is the significance of the $135 million credit facility for PSI?
The credit facility significantly strengthens PSI's financial resources, enabling the company to pursue strategic initiatives and support ongoing innovation.
Who are the main financial partners involved in this agreement?
The financial agreement involves Standard Chartered Bank and various participating lenders, demonstrating the trust in PSI's operational capabilities.
How will the funds from the credit facility be utilized?
PSI plans to use the funds to enhance its growth strategy, innovate its product offerings, and reinforce its operational capabilities.
What are the expectations regarding PSI's financial performance?
PSI has experienced profitability and positive cash flows, indicating a strong financial position that is expected to continue in the coming years.
What types of products does PSI specialize in?
PSI specializes in advanced, emission-certified engines and comprehensive power systems suitable for various industrial applications and transportation solutions.
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