Preformed Line Products secures $27.4 million loan for new Poland plant

Preformed Line Products Company (NASDAQ:PLPC), a $722 million market cap company with strong financial health metrics according to InvestingPro, announced Tuesday that its subsidiary, PLP Poland (Belos) S.A., has entered into a non-revolving investment loan agreement with Bank Polska Kasa Opieki Spółka Akcyjna (Bank Pekao S.A.) to finance the construction of a new manufacturing facility in Poland.

According to a statement based on a recent SEC filing, the loan provides for up to PLN100.3 million ($27.4 million) in financing. The facility is guaranteed by Preformed Line Products and is secured by both the existing PLP Poland manufacturing plant, the new plant under construction, and all fixed assets at both locations. Notably, the company maintains a healthy balance sheet with more cash than debt and a conservative total debt-to-capital ratio of just 6%.

The loan will accrue interest at the one-month Warsaw Interbank Offered Rate (WIBOR) plus 1.0% per annum. If the company’s funded debt to earnings before interest, taxes, and depreciation ratio exceeds 3.0 to 1, the WIBOR spread will increase to 1.5%. The agreement also includes requirements for maintaining certain levels of net worth and profitability.

The maturity date for the loan is January 31, 2035. Repayment will occur through annual installments: PLN5.3 million ($1.5 million) in 2026, PLN9.0 million ($2.5 million) in 2027, PLN9.6 million ($2.6 million) each year from 2028 through 2034, and a final payment of PLN18.8 million ($5.2 million) in 2035.

The company stated that the agreement is intended to support the construction of the new plant, and the terms are further detailed in the investment loan agreement filed as an exhibit to the Form 8-K.

This information is based on a press release statement included in the company’s filing with the Securities and Exchange Commission.

In other recent news, Preformed Line Products Company has announced the acquisition of JAP Telecom (BCBA:TECO2m), a Brazilian provider of connectivity solutions. This strategic move aims to enhance Preformed Line Products’ telecommunications infrastructure offerings in South America. JAP Telecom, established in 2002, has been a key player in serving major telecommunications operators and internet service providers in the region. Additionally, Preformed Line Products disclosed the results of its annual shareholder meeting held at its headquarters in Mayfield Village, Ohio. Shareholders re-elected four directors to the company’s Board, ensuring leadership continuity until the 2027 annual meeting. The directors re-elected are Maegan A. R. Cross, Matthew D. Frymier, Richard R. Gascoigne, and Robert G. Ruhlman. This information was based on the company’s recent SEC filing.

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