Lunenburg, NS, Oct. 15 - High Liner Foods Incorporated today commented on the recent news of the receivership of one of Iceland's major banks, Landsbanki, one of High Liner's three lenders under its working capital credit facility.
In December 2007, High Liner entered into a CA$120 million credit facility with a syndicate of lenders consisting of the Royal Bank of Canada, as Lender and Administrative Agent and CIT Business Credit Canada Inc., as Lender and Collateral Agent.
Landsbanki Islands hf participated in the syndication of the loan by providing a U.S. dollar revolving credit facility of CA$40 million to High Liner's U.S. subsidiary, High Liner Foods (USA), Incorporated. At present, less than $15 million is outstanding on that portion of the facility, including letters of credit. Landsbanki has notified the Agent that it would not respond at this time to High Liner's most recent call for an advance on the facility, and it has not provided any concrete information with respect to its ability to continue as a lender in the syndication.
Kelly Nelson, Chief Financial Officer of High Liner Foods, commented: "While the outcome of the Landsbanki situation is unknown, our overall credit facility is sufficient to fund our current operating requirements. Including the amount outstanding to Landsbanki, our total current borrowings are only $39.2 million and, including letters of credit at $8.8 million, our total utilization is $48.0 million, or 40% of the credit authorized under the overall syndicated facility." Mr. Nelson also noted: "High Liner is fully compliant with its obligations under the facility and Landsbanki has not to date indicated that it will not recommence servicing High Liner's loan." The terms of the credit agreement require that the Agent suspend any repayments to a defaulting lender.
High Liner has no exposure to any other Icelandic bank.