Houston-based Orion Group Holdings Inc. (NYSE:ORN) has entered into a fourth amendment of its existing loan agreement, according to a recent filing with the Securities and Exchange Commission. The construction company, specializing in heavy construction services, reported that the amendment includes significant changes to its financial covenants and prepayment schedules.
The amendment, finalized on June 28, 2024, adjusts the Minimum Liquidity covenant, which now mandates that the company and its subsidiaries maintain liquidity above a staggered threshold ranging from $8.0 million to $15.0 million over the coming months. Specifically, the liquidity should not drop below $8.0 million until July 26, 2024, with a temporary allowance for it to be as low as $5.0 million on one Friday within that period. From July 27, 2024, the threshold increases to $10.0 million and further escalates to $15.0 million starting October 1, 2024, until the maturity date of the loan.
Moreover, the amendment revises the prepayment structure, replacing a single $10.0 million payment due on June 30, 2024, with a series of payments totaling $15.0 million spread across several dates from late July to the end of October 2024. Additionally, if Orion Group Holdings completes the sale of the East and West Jones Property before September 30, 2024, the company is obliged to make a mandatory prepayment on the term loans from the net proceeds within three business days, reducing the prepayment amount by any already made.
Other administrative and definitional changes are also part of the amendment, which aims to provide the company with more flexibility in managing its financial obligations. This strategic move by Orion Group Holdings comes as part of its ongoing financial management efforts.
The details of the amendment, including the conditions and revised covenants, are outlined in Exhibit 10.1 of the 8-K filing. This information is based on the statement provided in the press release.
In other recent news, Orion Marine Group has been in the spotlight due to a series of significant events. The company's recent earnings and revenue results have shown promising growth, attributed to effective management changes and favorable industry trends.
Analysts at B.Riley maintained a Buy rating on Orion Marine Group, increasing the price target to $12.50. They credit the company's growth phase and improved profit margins to recent management changes and a positive marine construction market, as evidenced by Orion's bid pipeline expansion from $3 billion to $11 billion.
Moreover, Orion Marine Group is set to join the Russell 3000 and Russell 2000 Indices, a move expected to enhance the company's stock visibility and attract a broader range of investors. This inclusion, anticipated to commence on July 1, 2024, is seen as a reflection of the company's transformation and growth. Additionally, Craig-Hallum initiated coverage on Orion Marine Group with a Buy rating and a price target of $14.00, suggesting that the stock is currently undervalued.
In other company news, Richard L. Daerr, Jr. is set to retire from Orion's Board of Directors at the upcoming Annual General Meeting of Stockholders, reducing the board's size from eight to seven directors.
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