Danimer Scientific Announces Improved Liquidity Position with Closing of $130 Million Senior Secured Term Loan

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Danimer Scientific Announces Improved Liquidity Position with Closing of $130 Million Senior Secured Term Loan

-- Announces Date for Fourth Quarter and Full Year 2022 Earnings Call --

Danimer Scientific, Inc. (DNMR) (“Danimer” or the “Company”), a leading next-generation bioplastics company focused on the development and production of biodegradable materials, today announced it had closed a new senior secured term loan (“Term Loan”) with an aggregate principal amount of $130 million that expands its capital structure, significantly improves its near-term liquidity position, and enables it to maintain strategic and operational flexibility as it executes its growth strategy.

Stephen E. Croskrey, Danimer’s Chairman and Chief Executive Officer, commented, “We are pleased to complete this transaction, as it provides us with the financial flexibility to better navigate the market environment as we grow our business. We elected to enhance our liquidity position through debt as we view this as a much better alternative than dilution to shareholders at current market prices. We believe that our growth opportunities are excellent and that our PHA-based biodegradable resins are disrupting the use of petroleum-based plastic across a range of end-use categories. We are looking forward to taking full advantage of our successful expansion of capacity in our Kentucky manufacturing facility, and we are energized by the momentum in our business.”

The Term Loan, arranged by Jefferies (JEF), bears interest at an annual rate of 14.4 percent, is secured by the assets of the Company, and is backed pursuant to the terms of the loan agreement by collateral protection insurance arranged by AON plc (AON). After customary fees and expenses associated with the transaction, net proceeds to the Company were $98.6 million of which $12.5 million will be held in a restricted reserve account for future interest payments. The result is a net increase of $86.1 million of liquidity to Danimer to support general corporate purposes. The Term Loan contains a minimum liquidity requirement that will terminate upon obtaining the necessary consents for one of its subsidiaries to be become a guarantor under the Term Loan, which the Company expects to obtain within approximately 45 days. In connection with the Term Loan, Danimer issued a warrant to Jefferies to purchase 1,500,000 shares of the Company’s Class A common stock at an exercise price of $7.50 per share, subject to customary adjustments, at any time during the five-year exercise period.

The Company noted that the Term Loan matures on the earlier of March 17, 2027, or September 15, 2026, if more than $100 million principal amount of the Company’s current convertible notes remains outstanding at such date.

Pre-announcement of Full Year 2022 Results In-line with Guidance Ranges

The Company plans to release its fourth quarter and full-year 2022 financial results on March 28, 2023, and expects to report the following:

  • Revenues of $53.2 million for the full year of 2022 compared to $58.7 million in the prior year. PHA-related sales grew by 34 percent over the prior year and represented 53 percent of 2022 revenue. PLA-based product sales declined $9.9 million from the prior year, which included $9.1 million of shipments to certain customers that sell product in Ukraine that did not recur in 2022 due to the ongoing war there.
  • Full-year 2022 net loss of $(180) million, which included a $63 million goodwill impairment charge in the third quarter.
  • Full-year 2022 Adjusted EBITDA1 of $(45) million, consistent with the guidance range the Company first provided in May of 2022 and its most recent guidance of $(45) million to $(40) million.
  • Cash and cash equivalents at year-end of $63 million, consistent with the Company’s most recent guidance of $60 million to $65 million.
  • Full-year capital expenditures of $165 million, consistent with the Company’s most recent guidance of $165 million to $170 million.

(1) An explanation of the non-GAAP measure disclosed in this release and a reconciliation of such non-GAAP result to the comparable GAAP measure is included in the “Non-GAAP Financial Measure” section of the release.

Webcast and Conference Call

The Company will host a webcast and conference call on Tuesday, March 28, 2023, at 5:00 p.m. Eastern time to review fourth quarter and full-year 2022 results, discuss recent events and conduct a question-and-answer session. The live webcast of the conference call can be accessed on the Investor Relations section of the Company’s website at https://ir.danimerscientific.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-877-407-9208 or 1-201-493-6784, respectively. Upon dialing in, please request to join the Danimer Scientific Full Year 2022 Earnings Conference Call. The archived webcast will be available for replay on the Company's website after the call.

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