OKOTOKS, AB - Mullen (NASDAQ:MULN) Group Ltd. (TSX:MTL), a major Canadian logistics provider, has announced the establishment of a new $125 million credit agreement with PNC Bank Canada Branch. This agreement is part of the company's strategy to bolster its financial flexibility in a volatile economic environment.
The new PNC Credit Facility, combined with existing agreements with the Canadian Imperial Bank of Commerce and the Royal Bank of Canada, brings Mullen Group's total borrowing capacity to $375 million. This expansion in borrowing capacity is intended to provide the company with additional liquidity and the means to adapt to changing market conditions, including fluctuating interest rates.
According to Carson P. Urlacher, Senior Accounting Officer at Mullen Group, the increased credit facilities will enable the company to pursue strategic acquisition opportunities, aiming to grow the organization and create shareholder value. Mullen Group's relationship with PNC began in 2021 and has now evolved into a significant financial partnership.
As of December 31, 2023, Mullen Group had drawn $73 million from its credit facilities with CIBC and RBC, marking a decrease from the $114.2 million drawn as of September 30, 2023. The addition of the PNC Credit Facility now provides the company with over $300 million in available borrowing.
The credit facilities are unsecured and offer loans in both Canadian and U.S. dollars, with interest rates based on the respective Canadian and U.S. bank prime rates plus a margin. Mullen Group's subsidiary, MT Investments Inc., has provided an unlimited guarantee for any indebtedness on these facilities, which do not have financial covenants but require the company to avoid defaults and comply with reporting and general covenants typical for such financial arrangements.
Mullen Group is known for its network of independently operated businesses offering a variety of services, including transportation and logistics, as well as specialized services related to industries such as energy, mining, and construction in Western Canada.
This financial development is based on a press release statement.
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