Arq, Inc. (NASDAQ: ARQ) shares fell off Thursday. The company, a producer of activated carbon and other environmentally efficient carbon products, today announced the successful closing of an asset-based revolving credit facility with MidCap Financial, a leading commercial finance company focused on middle market transactions.
Proceeds from the Facility are expected to be utilized to refinance Arq's outstanding CF Global Term Loan, finance ongoing growth capital expenditures and working capital requirements related to the Company's strategic growth investment at its Red River plant, as well as support general corporate purposes.
"The successful closing of this Facility marks a significant milestone for our Company," said Bob Rasmus, CEO of Arq. "It enhances our financial flexibility while substantially reducing our cost of capital to better align with our current business position. The loan associated with the Arq acquisition in 2023 had become an inefficient source of funding and does not reflect the transformational advancements we have made across the business."
Under the terms of the Facility, Arq may draw up to $30 million, based on a borrowing base equivalent to 85% of Arq's eligible accounts receivable, plus 85% of the net orderly liquidation value of eligible inventory. The Facility has a five-year term and the interest rate on the outstanding balance of the Facility will be Adjusted Term SOFR + 4.50%, subject to a SOFR floor of 2.5%.
ARQ shares dipped 6.5 cents to $7.50.
