Annual report pursuant to Section 13 and 15(d)

Bank and Other Borrowings

v3.20.4
Bank and Other Borrowings
12 Months Ended
Dec. 31, 2020
Bank And Other Borrowings [Abstract]  
Bank and Other Borrowings

9. BANK AND OTHER BORROWINGS

As of December 31, 2020 and 2019, the current portion of bank and other borrowings amounts to $16.1 million and $11.2 million, respectively. As of December 31, 2020, this item is comprised of $10.8 million of the current portion of long-term bank and other borrowings and of $5.3 million of credit line facilities. As of December 31, 2019, this item was comprised of $7.6 million of the current portion of long-term bank and other borrowings and of $3.6 million of credit line facilities.

Credit line facilities

As of December 31, 2020, the Company had credit line facilities granted of $7.7 million, of which $5.3 million had been used. As of December 31, 2019, the Company had credit line facilities granted of $5.6 million, of which $3.6 million had been used.

The above lines of credit may be drawn upon at variable interest rates in the following range: 0.6% - 7.6%.

The weighted average interest rate on the credit line facilities outstanding as of December 31, 2020, was 1.34%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Interest Nominal Rate

 

 

 

As of December 31,

 

 

 

 

 

 

 

 

As of December 31,

 

 

 

2020

 

 

2019

 

 

Maturity

 

Interest Contractual Rate

 

 

2020

 

 

2019

 

UniCredit S.p.A. (Line A Tranche (1)

 

$

3,235

 

 

$

3,609

 

 

January 2023

 

Euribor 3 months + 3.10%

 

 

 

2.80

%

 

 

2.80

%

UniCredit S.p.A. (Line A Tranche (2)

 

 

153

 

 

 

167

 

 

May 2023

 

Euribor 3 months + 3.10%

 

 

 

2.80

%

 

 

2.80

%

UniCredit S.p.A. (Line B)

 

 

3,030

 

 

 

3,229

 

 

November 2023

 

Euribor 3 months + 2.90%

 

 

 

2.60

%

 

 

2.60

%

UniCredit S.p.A. (Line C)

 

 

2,521

 

 

 

2,787

 

 

February 2023

 

Euribor 3 months + 3.90%

 

 

 

3.36

%

 

 

3.53

%

Intesa Sanpaolo S.p.A. (Line 1)

 

 

931

 

 

 

988

 

 

April 2022

 

Euribor 3 months + 1.80%

 

 

 

1.26

%

 

 

1.88

%

Intesa Sanpaolo S.p.A. (Line 2)

 

 

4,292

 

 

 

4,183

 

 

April 2024

 

Euribor 3 months + 2.60%

 

 

 

2.06

%

 

 

2.60

%

Intesa Sanpaolo S.p.A. (Line 3)

 

 

9,688

 

 

 

 

 

June 2026

 

Euribor 3 months + 1.65%

 

 

 

1.11

%

 

 

 

Intesa Sanpaolo S.p.A. (Line 4)

 

 

6,734

 

 

 

 

 

July 2026

 

Euribor 3 months + 1.70%

 

 

 

1.16

%

 

 

 

UBI Banca S.p.A. (Line 1)

 

 

209

 

 

 

332

 

 

August 2021

 

Euribor 3 months +1.25%

 

 

 

1.25

%

 

 

1.25

%

UBI Banca S.p.A. (Line 2)

 

 

1,031

 

 

 

1,499

 

 

October 2021

 

Euribor 3 months +1.95%

 

 

 

1.41

%

 

 

1.55

%

Monte dei Paschi di Siena S.p.A. (Line 1)

 

 

328

 

 

 

521

 

 

April 2022

 

 

0.95

%

 

 

0.95

%

 

 

0.95

%

Monte dei Paschi di Siena S.p.A. (Line 2)

 

 

2,037

 

 

 

 

 

June 2023

 

 

1.50

%

 

 

1.50

%

 

 

 

Banco BPM S.p.A. (Line 1)

 

 

1,056

 

 

 

1,336

 

 

June 2023

 

Euribor 3 months + 2.00%

 

 

 

2.00

%

 

 

2.00

%

Banco BPM S.p.A. (Line 2)

 

 

 

 

 

3,893

 

 

September 2022

 

Euribor 3 months + 2.00%

 

 

 

 

 

 

2.00

%

Banco BPM S.p.A. (Line 3)

 

 

6,355

 

 

 

 

 

March 2024

 

Euribor 3 months + 3.00%

 

 

 

2.46

%

 

 

 

Simest 1

 

 

307

 

 

 

280

 

 

December 2023

 

 

0.50

%

 

 

0.50

%

 

 

0.50

%

Simest 2

 

 

305

 

 

 

279

 

 

December 2023

 

 

0.50

%

 

 

0.50

%

 

 

0.50

%

Simest 3

 

 

560

 

 

 

512

 

 

December 2023

 

 

0.50

%

 

 

0.50

%

 

 

0.50

%

Finlombarda S.p.A.

 

 

 

 

 

83

 

 

December 2020

 

 

0.50

%

 

 

0.50

%

 

 

0.50

%

Total bank and other borrowings

 

 

42,772

 

 

 

23,698

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: current portion

 

 

10,798

 

 

 

7,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total long-term portion

 

$

31,974

 

 

$

16,134

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All bank and other borrowings are unsecured borrowings of Kaleyra.

On October 7, 2020, Kaleyra S.p.A. received a third approval by Intesa Sanpaolo S.p.A. to postpone payment of the amounts due under the existing Line 1 and Line 2 loans for an additional 3 months. As a result of this approval the Company postponed the payments of approximately $404,000 beyond December 31, 2020.

On July 29, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “Intesa Loan Agreement (Line 4)”) with Intesa Sanpaolo S.p.A. denominated in Euro for a total of €5.5 million ($6.5 million at the July 29, 2020 exchange rate). The proceeds of the loan may be used for general corporate purposes, including to help accelerate the Company’s growth. The Intesa Loan Agreement (Line 4) has a maturity of 72 months from the date of disbursement and bears interest at a variable rate equal to the three-month Euribor plus a spread of 1.70%. The loan is to be repaid in 20 quarterly installments with a grace period for principal payments for the first 12 months. The loan is subject to financial covenants, in accordance with the terms and conditions set forth within the Intesa Loan Agreement (Line 4). The loan is guaranteed up to ninety percent of its principal amount by Mediocredito Centrale S.p.A., the Italian state-owned export credit finance agency, and is made pursuant to a program to address COVID-19 and the Italian Government’s support for Italian businesses, as stated within Article 13 of the Decree Law 23/2020 and conversion Law 40/2020, and obligations and representations included therein. The total amount of the loan, less amounts related to commissions, fees and expenses, was drawn in full the same date as of the agreement.

On July 16, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “Intesa Loan Agreement (Line 3)”) with Intesa Sanpaolo S.p.A. denominated in Euro for a total of 7.9 million ($9.0 million at the July 16, 2020 exchange rate). The Intesa Loan Agreement (Line 3) has a maturity of 72 months from the date of disbursement and bears interest at a variable rate equal to the three-month Euribor plus a spread of 1.65%. The loan is to be repaid in 16 quarterly installments with a grace period for principal payments for the first 24 months. The loan is subject to financial covenants, in accordance with the terms and conditions set forth within the Intesa Loan Agreement (Line 3). The loan is guaranteed up to ninety percent of its principal amount by SACE S.p.A., the Italian state-owned export credit finance agency, and is made pursuant to a program to address COVID‑19 and the Italian Government’s support for Italian businesses, as stated within Article 1 of the Decree Law 23/2020 (the “Decree”) and conversion Law 40/2020. In consideration of the facilitated nature of the guarantee that secures this loan, and pursuant to the general conditions of the SACE guarantee, Kaleyra S.p.A. undertakes to comply with a number of obligations and representations, including the payment of the guarantee annual fee (SACE guarantee remuneration), pursuant to Article 1 of the Decree. The total amount of the loan, less amounts related to commissions, fees and expenses, was drawn in full the same date as of the agreement.

On June 29, 2020, Kaleyra S.p.A. received a second approval by Intesa Sanpaolo S.p.A. to postpone payment of the amounts due under the existing Line 1 and Line 2 loans for an additional 3 months. As a result of this approval the Company has postponed the payments of approximately $404,000 beyond December 31, 2020.  

On April 24, 2020, Kaleyra S.p.A. received the approval by Simest S.p.A. to postpone the amounts due under the existing loans in 2020. As a result of this approval, the Company has postponed the payments of approximately $350,000 beyond December 31, 2020.

On April 9, 2020, Kaleyra S.p.A. received the approval by UniCredit to postpone the amounts due under the existing loans for the following 6 months. As a result of this approval, the Company has postponed the payments of approximately $1.6 million beyond the following 6 months.

On April 7, 2020, Kaleyra S.p.A. received the approval by UBI Banca S.p.A. to postpone the amounts due under the existing loans for the following 6 months. As a result of this approval, the Company has postponed the payments of approximately $694,000 beyond the following 6 months.

On March 31, 2020, Kaleyra S.p.A. received the approval by Intesa Sanpaolo S.p.A. to postpone payment of the amounts due under the existing Line 1 and Line 2 loans for the following 3 months. As a result of this approval the Company has postponed the payments of approximately $404,000 beyond December 31, 2020.

On March 20, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “BPM Loan Agreement (Line 3)”) with Banco BPM S.p.A. (formerly Banco Popolare di Milano S.p.A.) denominated in Euro for a total of €6.0 million ($6.4 million at the March 20, 2020 exchange rate). The BPM Loan Agreement (Line 3) included a new financing of $2.7 million with the remaining balance used to pay off the original loan dated July 23, 2019, by and between Kaleyra S.p.A. and Banco BPM S.p.A. The BPM Loan Agreement has a maturity of 45 months from the date of first repayment and bears interest at a variable rate equal to the three-month Euribor plus a spread of 3.00%. The BPM Loan Agreement (Line 3) is to be repaid in 15 quarterly installments. The total amount of the BPM Loan Agreement (Line 3), less amounts related to commissions, fees and expenses, was drawn in full the same date as the BPM Loan Agreement (Line 3).

On March 11, 2020, Kaleyra S.p.A. entered into a 36-month (from first repayment date) unsecured loan agreement with Monte dei Paschi di Siena S.p.A. (the “Monte dei Paschi di Siena Loan Agreement – Line 2”) denominated in Euro for a total of €2.0 million ($2.3 million at the March 11, 2020 exchange rate). The total amount of this new facility was drawn in full the same date. This facility bears interest at a fixed rate equal to 1.5%.

In connection with the above-mentioned financing agreements entered into in the year ended December 31, 2020, the Company incurred $124,000 of debt issuance costs that will be amortized over the maturity of the respective financing agreements.

On August 2, 2019, the Company entered into a medium-term financing agreement with UniCredit S.p.A. (the “UniCredit Loan Agreement (Line C)”), denominated in Euro for a total of €2.5 million ($2.8 million at the August 2, 2019 exchange rate) to be repaid in quarterly installments starting from February 2020. The financing will bear interest at a variable rate (Euribor 3 months plus 3.9% spread). The notional amount was fully drawn on the same date. On April 9, 2020, the maturity date was revised to February 2023, as referred above.

On July 25, 2019, the Company entered into a medium-term financing agreement with Intesa Sanpaolo S.p.A. (the “Intesa Loan Agreement (Line 2)”), denominated in Euro, for a total notional amount of €4.0 million ($4.4 million at the July 25, 2019 exchange rate) to be repaid in quarterly  installments starting from October 2019. The financing has a maturity of 48 months from the date of disbursement and bears interest at a variable rate (Euribor 3 months plus 2.6% spread). The total amount was drawn in full on the same date. Proceeds were used to settle the remaining deferred consideration due for the acquisition of Buc Mobile. On October 7, 2020, the maturity date was revised to April 2024, as described above.

On July 23, 2019, the Company entered into a medium-term financing agreement with Banco Popolare di Milano S.p.A. (the “BPM Loan Agreement (Line 2)”), denominated in Euro for a total of €4.0 million ($4.5 million at the July 23, 2019 exchange rate) to be repaid in quarterly installments. The financing has a maturity of 24 months from the date of disbursement and bears interest at a variable rate (Euribor 3 months plus 2.0% spread). The total amount was drawn in full on the same date and proceeds were used to settle the total deferred consideration for the acquisition of Solutions Infini. On March 20, 2020, the BPM Loan Agreement (Line 2) was paid off with proceeds from the new BPM Loan Agreement – Line 3, as described above.

On April 30, 2019, the Company entered into a new long-term financing with Banco Popolare di Milano S.p.A. (the “BPM Loan Agreement (Line 1)”), denominated in Euro for a total amount of €1.2 million ($1.3 million at the April 30, 2019 exchange rate), to be repaid in quarterly installments with maturity in June 2023.

On April 10, 2019, the Company entered into a new medium-term financing with UBI Banca S.p.A. (the “UBI Loan Agreement (Line 2)”), denominated in Euro for a total amount of €2.0 million ($2.3 million at the April 10, 2019 exchange rate), to be repaid in monthly installments with maturity in April 2021. On April 7, 2020, the maturity date was revised to October 2021, as described above.

On April 10, 2019, the Company entered into a new medium-term financing with Monte dei Paschi di Siena S.p.A. (the “MPS Loan Agreement (Line 1)”), denominated in Euro for a total amount of €600,000 ($677,000 at the April 10, 2019 exchange rate), to be repaid in monthly installments with maturity in April 2022.

On January 30, 2019, the Company entered into a new long-term financing with Simest (the “Simest 3”) denominated in Euro for a total of €608,000 ($695,000 at the January 30, 2019 exchange rate) to be repaid in quarterly installments with maturity in December 2022. On April 24, 2020, the maturity date was revised to December 2023, as described above.

As of December 31, 2020, all of the available long-term facilities were drawn in full.

The above facilities include a series of statements and disclosure obligations, in line with the standard practice for these types of financings, whose breach could result in termination, early repayment or enforcement of acceleration rights. In particular, the UniCredit Facility and the Intesa Sanpaolo Facility include, among other, change of control provisions that may cause the bank to request immediate repayment of the outstanding debt under the relevant facility as a result of such a change of control event.  Upon the consummation of the Business Combination, Kaleyra S.p.A. formally agreed with UniCredit S.p.A. and Intesa Sanpaolo S.p.A. that the Business Combination does not represent a change of control event with respect to the respective outstanding borrowing.

In addition, some of the above facilities require compliance with certain financial covenants, based on Kaleyra S.p.A.’s EBITDA, net financial position and equity. Failure to comply with those financial covenants would result in the immediate repayment of the outstanding debt under the relevant facility. As of December 31, 2020, the Company is in compliance with all the financial covenants.

Interest expense on bank and other borrowings was of $835,000 for the year ended December 31, 2020 and $565,000 for the year ended December 31, 2019.

As of December 31, 2020, the Company is obliged to make payments as follows (in thousands):

 

 

 

As of December 31, 2020

 

2021

 

$

10,798

 

2022

 

 

11,364

 

2023

 

 

9,725

 

2024

 

 

4,841

 

2025

 

 

3,792

 

2026 and thereafter

 

 

2,252

 

Total

 

$

42,772