| LONG TERM DEBT AND FINANCING |
9.LONG-TERM DEBT AND FINANCING | | | | | | | | | | | As at September 30, | | | As at March 31, | | | | 2022 | | | 2022 | | DIP Facility (a) | | $ | 55,000 | | $ | 125,000 | | Filter Group financing (b) | | | 386 | | | 1,419 | | Total debt | | | 55,386 | | | 126,419 | | Less: Current portion | | | (55,384) | | | (126,289) | | Total long-term debt | | $ | 2 | | $ | 130 | |
Future annual minimum principal repayments are as follows: | | | | | | | | | | | | | | | | | | Less than | | | | | | | | More than | | | | | | 1 year | | 1–3 years | | 4–5 years | | 5 years | | Total | DIP Facility (a) | | $ | 55,000 | | $ | – | | $ | – | | $ | – | | $ | 55,000 | Filter Group financing (b) | | | 384 | | | 2 | | | – | | | – | | | 386 | Total principal repayment | | $ | 55,384 | | $ | 2 | | $ | – | | $ | – | | $ | 55,386 |
The following table details interest expense. Interest is expensed based on the effective interest rate. | | | | | | | | | | | | | | | | Three months ended September 30, | | Six months ended September 30, | | | | 2022 | | 2021 | | 2022 | | 2021 | | DIP Facility (a) | | $ | 4,014 | | $ | 3,651 | | $ | 8,065 | | $ | 8,357 | | Filter Group financing (b) | | | 1 | | | 64 | | | 29 | | | 143 | | Credit Facility (c) | | | 4,568 | | | 4,096 | | | 8,695 | | | 8,094 | | Term Loan (d) | | | – | | | – | | | - | | | (54) | | Note Indenture (e) | | | – | | | – | | | - | | | (1) | | Collateral cost and other | | | 338 | | | (57) | | | 650 | | | 45 | | Supplier finance and others | | | – | | | – | | | (30) | | | – | | Total interest expense | | $ | 8,921 | | $ | 7,754 | | $ | 17,409 | | $ | 16,584 | |
| (a) | As discussed in Note 1, Just Energy filed and received the Court Order under the CCAA on March 9, 2021. In conjunction with the CCAA filing, the Company entered into the DIP Facility for $125.0 million. Just Energy Ontario L.P., Just Energy Group Inc. and Just Energy (U.S.) Corp. are the borrowers under the DIP Facility and are supported by guarantees of certain subsidiaries and secured by a super-priority charge against and attaching to the property that secures the obligations arising under the Credit Facility, created by the Court Order. The DIP Facility has an interest rate of 13.0%, paid quarterly in arrears. On November 11, 2021, the Company amended the DIP Facility to extend the maturity of the DIP Facility to September 30, 2022. On August 4, 2022, the Company amended the DIP Facility to further extend the maturity of the DIP Facility to the Outside Date as defined in the SISP Support Agreement. The DIP Facility terminates at the earlier of: (a) the Outside Date, (b) the implementation date of the SISP, (c) the lifting of the stay in the CCAA proceedings or (d) the termination of the CCAA proceedings. On September 26, 2022, the Company voluntarily repaid $70 million of principal plus |
| | accrued interest of the DIP Facility. The outstanding principal remaining under the DIP Facility as at September 30, 2022 is $55 million. For consideration for making the DIP Facility available, Just Energy paid a 1.0% origination fee, a 1.0% commitment fee on March 9, 2021 and a 1.0% amendment fee on November 16, 2021. |
| (b) | Filter Group has a $0.4 million outstanding loan payable to HTC. The loan is a result of factoring receivables to finance the cost of rental equipment that matures no later than October 2023 with HTC, and bears interest at 8.99% per annum. Principal and interest are payable monthly. Filter Group did not file under the CCAA and, accordingly, the stay does not apply to Filter Group and any amounts outstanding under the loan payable to HTC. |
| (c) | On March 18, 2021, Just Energy Ontario L.P, Just Energy (U.S.) Corp. and Just Energy Group Inc. entered into the Lender Support Agreement with the lenders under the Credit Facility. Under the Lender Support Agreement, the lenders agreed to allow issuance or renewals of Letters of Credit under the Credit Facility during the pendency of the CCAA proceedings within certain restrictions. In return, the Company has agreed to continue paying interest and fees at the non-default rate on the outstanding advances and Letters of Credit under the Credit Facility. The amount of Letters of Credit that may be issued is limited to the lesser of CAD $46.1 million (excluding the Letters of Credit guaranteed by Export Development Canada under its Account Performance Security Guarantee Program), plus any amount the Company has repaid and CAD $125.0 million. As at September 30, 2022, the Company had repaid CAD $86.3 million and had a total of CAD $120.4 million of Letters of Credit outstanding. |
Certain amounts outstanding under the LC Facility are guaranteed by Export Development Canada under its Account Performance Security Guarantee Program. As at September 30, 2022, the Company had $42.0 million of Letters of Credit outstanding and Letter of Credit capacity of $2.2 million available under the LC Facility. Just Energy’s obligations under the Credit Facility are supported by guarantees of certain subsidiaries and secured by a general security agreement and a pledge of the assets and securities of Just Energy and the majority of its operating subsidiaries, excluding primarily Filter Group. Just Energy has also entered into an intercreditor agreement in which certain commodity and hedge providers are also secured by the same collateral. As a result of the CCAA filing, the borrowers are in default under the Credit Facility. However, any potential actions by the lenders have been stayed pursuant to the Court Order. The outstanding advances are all prime rate advances at a rate of bank prime (Canadian bank prime rate or U.S. prime rate) plus 4.25% and letters of credit are at a rate of 5.25%. As at September 30, 2022, the Canadian prime rate was 5.45% and the U.S. prime rate was 6.25%. As a result of the CCAA filing, the Credit Facility is reflected as a liability subject to compromise. | (d) | As part of the September 2020 Recapitalization, Just Energy issued the Term Loan maturing on March 31, 2024. The Term Loan bears interest at 10.25%. The balance at September 30, 2022 includes an accrual of $12.6 million for interest payable on the Term Loan through March 9, 2021. As a result of the CCAA filing, the Company is in default under the Term Loan. However, any potential actions by the lenders under the Term Loan have been stayed pursuant to the Court Order, and the Company is not issuing additional notes equal to the capitalized interest. The Term Loan is shown as liability subject to compromise. This Term Loan is unsecured and will not receive any amounts under the transaction as described in Note 1. |
| (e) | As part of the September 2020 Recapitalization, Just Energy issued the Note Indenture. The principal amount was reduced through a tender offer for no consideration on October 19, 2020 to CAD $13.2 million. The Note Indenture bears an annual interest rate of 7.0% payable in kind. The balance at September 30, 2022 includes an accrual of $0.4 million for interest payable on the Note Indenture through March 9, 2021. As a result of the CCAA filing, the Company is in default under the Note Indenture’s Trust Indenture agreement. However, any potential actions by the lenders under the Note Indenture have been stayed pursuant to the Court Order and the Company is not issuing additional notes equal to the capitalized interest. The Note Indenture is shown as a liability subject to compromise. The Note Indenture is unsecured and will not receive any amounts under the transaction as described in Note 1. |
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