PPIH · Perma-Pipe International Holdings, Inc.

This $18.0 million asset-based revolver replaces or supplements Perma-Pipe’s prior financing arrangements, signaling a strategic shift toward a more flexible, collateral-driven credit structure aligned with its working capital profile. The borrowing base formula—80% of eligible receivables and 25% of eligible inventory—directly links available liquidity to operational execution and inventory management discipline, making funding contingent on receivables quality and inventory turnover. Interest rate variability tied to the Company’s leverage ratio introduces incentive alignment: lower leverage improves pricing across both floating and SOFR-based loans, while higher leverage increases both interest and commitment costs. The inclusion of a conditional Fixed Charge Coverage Ratio covenant—only tested when availability falls below defined thresholds—provides breathing room during periods of strong liquidity but imposes discipline if working capital deteriorates. With maturity set for October 2027, the facility provides 18 months of committed capacity, reducing near-term refinancing risk but placing emphasis on achieving sustained operational improvement ahead of renewal. The joint and several guarantees by subsidiaries and broad security grant underscore the lender’s reliance on the consolidated enterprise, increasing intercompany financial interdependence. For investors, this facility supports ongoing operations and potential growth initiatives but introduces new compliance obligations and sensitivity to working capital metrics that warrant close monitoring in upcoming borrowing base certificates and compliance reports.