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Shenandoah Telecommunications Company (NASDAQ:SHEN), a Virginia-based telecommunications provider with a market capitalization of $704 million and annual revenue of $328 million, has amended its credit agreement, extending the maturity dates for its revolving credit facility and one of its term loans, according to a recent SEC filing. InvestingPro data indicates the company faces some financial challenges, with short-term obligations exceeding liquid assets.
On April 16, 2025, Shentel’s subsidiary, Shentel Broadband Operations LLC, and various financial institutions agreed to the Fourth Amendment of the existing Credit Agreement from July 1, 2021. This amendment pushes the maturity date of the $150 million revolving credit facility (the "Revolver") and the $150 million Term Loan A-1 to July 1, 2027, from their original due date of July 1, 2026.
Furthermore, the amendment alters the financial covenants of the agreement, increasing the maximum Total (EPA:TTEF) Net Leverage Ratio permitted as of the last day of any fiscal quarter to 4.75:1.00. The leverage ratio is a measure of the level of a company’s debt related to its earnings and is often used by lenders to assess the borrower’s ability to meet its debt obligations. Currently, Shentel maintains a debt-to-equity ratio of 0.47 and carries total debt of $432.63 million against an EBITDA of $84.75 million. For deeper insights into Shentel’s financial health metrics and additional analysis, investors can access the comprehensive Pro Research Report available on InvestingPro.
The Credit Agreement also includes a $150 million delayed draw amortizing term loan due July 1, 2028, and a $225 million delayed draw amortizing term loan with the same maturity date.
The details of this amendment, which is part of a series of changes made to the original Credit Agreement, are outlined in the Exhibit 10.1 attached to the SEC filing. This strategic financial maneuver provides Shentel with extended financial flexibility by modifying the terms of its existing debt structure.
This information is based on a press release statement and aims to provide Shentel’s stakeholders and investors with an understanding of the company’s latest financial arrangements. With a current ratio of 0.82, indicating potential liquidity challenges, these financial arrangements could be crucial for the company’s operational flexibility.
In other recent news, Shenandoah Telecommunications Co reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of -$0.11, which narrowly missed the forecast of -$0.10. The company’s revenue reached $85.41 million, falling short of the expected $88.6 million. Despite these misses, Shenandoah achieved a 22% revenue growth for the year, largely driven by acquisitions and fiber expansion. The company completed the integration of Horizon Markets, contributing $47.7 million in revenue. Analysts from Raymond (NSE:RYMD) James noted that the company anticipates a reduction in capital intensity by 2027, suggesting a focus on long-term profitability. Shenandoah plans capital spending of $250-$280 million for 2025, with a focus on expanding its fiber network. Additionally, Shenandoah’s CEO, Chris French, emphasized the strategic importance of fiber expansion, projecting that the Glow Fiber expansion markets will become the company’s largest line of business in terms of customers by 2026 and revenue by 2029. The company continues to face high capital expenditures, which may impact cash flow and investor confidence.
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