Note 10 - Debt

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

10. DEBT

The below table presents details of the Company's debt as at:

	December 31, 2022		December 31, 2021
Short term debt
Working capital facilities		14,267		3,450
Current maturity of long term debt
Current maturity of term loan		119,194		4,125
Current maturity of equipment loan		1,272		1,682
Current maturity of finance lease obligations		-		423
Total		134,733		9,680
Long term debt
Term loan, net of debt issuance costs		41,175		158,543
Equipment loan		-		1,632
Total		41,175		160,175

Working capital facilities

The Company has a number of working capital facilities in various countries in which it operates. These facilities provide for a combined borrowing capacity of approximately $28 million for a number of working capital products. These facilities bear interest at benchmark rate plus margins between 2.0% and 4.5% and are due on demand. These facilities are collateralized by various Company assets and have a total outstanding balance of $14.3 million as of December 31, 2022.

Term loan

On February 18, 2021, the Company completed a debt refinancing with a newly secured $185 million senior debt facility, comprising of $165 million term loan and a $20 million revolving credit facility. Under the new senior debt arrangement, the borrowings will bear a tiered interest rate and will range between LIBOR plus 375 to 450 basis points, subject to certain financial ratios. The Company is required to meet these financial ratios on a quarterly basis. As of December 31, 2022, the Company was in compliance with all financial covenants. The Adjusted Leverage in respect of the most recently completed Relevant Period was less than 2.25, hence the applicable margin was set at 375 basis points. 

On February 22, 2021, the Company used proceeds from the above facilities agreement to prepay and terminate the existing credit facility made available to it under that certain Amended and Restated Senior Term and Revolving Facilities Agreement, dated October 27, 2017.

The term loan facility was to amortize 2.5% on the date that is 21 and 24 months from closing, 3.75% on the date that is 27, 30, 33 and 36 months from closing, 5.0% on the date that is 39, 42, 45, 48 and 51 months from closing, 10% on the date that is 54 months from closing and 15% on the date that is 57 months from closing and balance to be paid on closure of term loan with the last installment due in 2026.

During the year, the Company redeemed its investment in CSS Corp LP and received proceeds of $45.6 million. The Company has utilised these proceeds and made a prepayment of senior debt of $41.3 million on January 10, 2023, according to clause 8.3 of the facilities agreement. Also, on January 11, 2023, the Company entered into a definitive “Sale and Purchase Agreement" pursuant to which Arabian Internet and Communications Services Company (Solutions) will acquire the Company’s indirect 51 percent ownership interest in CCC, which is the Company’s joint venture that operates in the Kingdom of Saudi Arabia. It is anticipated that the closing of the transactions contemplated by the Sale and Purchase Agreement will occur during the second quarter of 2023 and the Company is expected to receive proceeds net of tax of $55.1 million. The Company will apply these proceeds towards prepayment of the senior debt according to clause 8.2 read with clause 8.4 of the facilities agreement. Hence, the amount of $96.4 million is classified under 'Current Maturity of Term Loan' in the note above. Consequently, the revised principal payments due on the term loan are as follows:

Years	Amount
2023		119,194
2024		30,935
2025		10,746
		160,875

In 2021, the Company incurred a debt issuance cost of $11.3 million in connection with the new term loan. As per ASC 470, accounting guidance on term loan extinguishment, the Company has expensed off the debt issuance cost of $8.5 million paid to the lenders towards the new term loan and $2.5 million remaining unamortised debt issuance cost of the old term loan in interest expenses, net in the consolidated statement of income (loss).Debt issuance costs paid to the Company’s counsel and other third parties of $2.8 million was being amortized over the period of the new term loan. 

Following table presents the changes in debt issuance cost during the year ended December 31, 2022 and year ended December 31, 2021:

	December 31, 2022			December 31, 2021
Opening balance		2,332			2,670
Add: Debt issuance cost (refinancing of term loan)		-			11,269
Less: Expensed out (ASC 470 - extinguishment or modification)		-			(10,937	)
Less: Amortization of debt issuance cost*		(1,825	)		(670	)
Closing balance		507			2,332

*Includes one time amortization of $1,260 in current year.

Non-recourse factoring

We have entered into factoring agreements with financial institutions to sell certain of our accounts receivable under non-recourse agreements. Under the arrangement, the Company sells the trade receivables on a non-recourse basis and accounts for the transactions as sales of receivables. The applicable receivables are removed from the Company's consolidated balance sheet when the Company receives the cash proceeds. We do not service any factored accounts after the factoring has occurred. We utilize factoring arrangements as part of our financing for working capital. The balance of funds received from factored receivables under these agreements was $18.09 million and $21.6 million as of December 31, 2022 and December 31, 2021, respectively.

BMO Equipment Loan

On December 27, 2018, the Company executed an agreement to secure a loan against US and Canadian assets in the amount of $2.06 million at the interest of 7.57% per annum, to be repaid over 2.5 years. The loan was funded in January 2019 and fully repaid in May 2022.

Equipment Loan

On November 2, 2020, the Company executed Master Equipment Finance Agreement to finance purchase of equipment for $4 million at the interest of 5.27% per annum with a maturity date 34 months after the date of first utilization of equipment loan. The amounts outstanding as at December 31, 2022 is $1.3 million.

Finance lease obligations

From time to time and when management believes it to be advantageous, we may enter into other arrangements to finance the purchase or construction of capital assets. As on December 31, 2022, finance lease obligation is Nil