The agreement has the effect of extending and increasing Orchids' revolving working capital line of credit from $15 million to $25 million, increasing Orchids' revolving line of credit to include $20 million for the purchase and construction of assets in Oklahoma, and refinancing and extending Orchids' $10.8 million real estate loan and $7.2 million machinery and equipment loan into a single $30 million term loan, which also provides funding for the $16.7 million to be paid in accordance with the agreements with Fabrica de Papel San Francisco, S.A. de C.V.
Borrowings under the agreement will bear interest at variable rates with margins ranging from 1% to 2% above LIBOR.
Orchids Paper Products Company is an integrated manufacturer of tissue paper products serving the at home private label consumer market.
