Unique Fabricating Inc. (NASDAQ: UFAB) stock declined by 1.21% at the last close while the UFAB stock price tends to rise by 40.67% in the pre-market trading session. Unique Fabricating develops and manufactures parts for the transportation, appliance, medical, and consumer sectors. Auburn Hills, Michigan is UFAB’s headquarters.
What’s the update?
Their Forbearance Agreement with UFAB’s Lenders has been extended until February 28, 2022, according to UFAB.
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Doug Cain, President, and Chief Executive Officer commented,
UFAB has been cooperating with its lenders, and they are grateful for their continuous assistance. UFAB’s Lenders are aware of the well-documented and ongoing concern in the Transportation Market as to when the chip scarcity issues will be fully resolved. This arrangement ensures that UFAB has continuing access to its credit facilities and, in their opinion, adequate liquidity to meet their present needs. They feel that the extension gives them enough time to resolve the uncertainties over the timing of the industry’s recovery in the second half of 2021 and into 2022.
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UFAB can finish talks with the Lenders to engage into an amendment and waiver to remedy the defaults during the forbearance period. Third-party predictions keep pointing to an overall market rebound starting in the second half of 2022 and lasting through 2023 since consumer demand is robust and inventory levels are at record lows at this time. The aforementioned variables are also expected to have a good influence on their Appliance Market Company.
As previously stated, UFAB entered into a Forbearance Agreement with its lenders under which UFAB has continuous access to its credit facilities for a period beginning April 9, 2021, and ending June 15, 2021. Pursuant to the terms and circumstances for issuing a revolving credit advance, comprising availability, and the Lenders agreed to forego pursuing their rights or demanding payment of UFAB’s debt or disposing of the collateral backing the loan, accordance with the provisions of the Forbearance Agreement. The Forbearance Agreement has now been extended until February 28, 2022. The Forbearance Agreement has been expanded to include minimum liquidity and minimum consolidated EBITDA criteria for each of the monthly periods until February 28, 2022.
Furthermore,
The forbearance period will be used by UFAB to pursue talks with the Lenders in order to reach an agreement on an amendment and waiver to rectify the defaults. There is no guarantee that UFAB will be able to engage into an amendment or waiver with the Lenders, or that if it does, what conditions, limitations, and covenants would be included in the amendment.
