Long-Term Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Long-Term Debt

Note 12. Long-Term Debt

As at December 31, 2023 and 2022, the Company has not drawn down on its revolving credit facility.

On May 31, 2023, Innospec Inc. and certain subsidiaries of the Company (together with the Company, the “Borrowers”) entered into a Multicurrency Revolving Facility Agreement with various lenders (the “Agreement”) which replaces the Company’s credit facility agreement dated September 26, 2019. The Agreement provides for a $250,000,000 four-year multicurrency revolving loan facility available to the Borrowers (the “Facility”). The Agreement also contains an accordion feature whereby the Company may elect to increase the total available borrowings by an aggregate amount of up to $125,000,000. The termination date of the Facility is May 30, 2027, but the Company has an option to request an extension of the Facility for a further year. As a consequence, the Company has capitalized $1.4 million of costs relating to the new Agreement which are to be amortized over the period to May 30, 2027. In addition, the Company has written-off $0.6 million of capitalized costs relating to the previous agreement.

The deferred finance costs of $1.2 million (December 31, 2022 – $0.6 million) related to the arrangement of the credit facility, are included within other current and non-current assets at the balance sheet dates.

(in millions)	2023			2022
Gross cost at January 1	$	1.8		$	1.8
Written off		(1.8	)		—
Capitalized in the year		1.4			—
		1.4			1.8
Accumulated amortization at January 1	$	(1.2	)	$	(0.8	)
Written off		1.4			—
Amortization in the year		(0.4	)		(0.4	)
	$	(0.2	)	$	(1.2	)
Net book value at December 31	$	1.2		$	0.6

Amortization expense was $0.4 million, $0.4 million and $0.3 million in 2023, 2022 and 2021, respectively. The charge is included in interest expense, see Note 2 of the Notes to the Consolidated Financial Statements.

The obligations of the Company under the credit facility are secured obligations and guaranteed by certain subsidiaries of the Company. Amounts available under the revolving facility may be borrowed in U.S. dollars, Euros, British pounds and other freely convertible currencies.

The Company’s credit facility contains restrictive clauses which may constrain our activities and limit our operational and financial flexibility. The facility obliges the lenders to comply with a request for utilization of finance unless there is an event of default outstanding. Events of default are defined in the credit facility and include a material adverse change to our assets, operations or financial condition. The facility contains a number of restrictions that limit our ability, among other things, and subject to certain limited exceptions, to incur additional indebtedness, pledge our assets as security, guarantee obligations of third parties, make investments, undergo a merger or consolidation, dispose of assets, or materially change our line of business.

In addition, the credit facility contains terms which, if breached, would result in it becoming repayable on demand. It requires, among other matters, compliance with the following financial covenant ratios measured on a quarterly basis: (1) the ratio of net debt to EBITDA shall not be greater than 3.5:1 and (2) the ratio of EBITDA to net interest shall not be less than 4.0:1. Management has determined that the Company has not breached these covenants throughout the period to December 31, 2023 and does not expect to breach these covenants for the next 12 months.

The weighted average rate of interest on borrowings was 0.00% at December 31, 2023 and 0.00% at December 31, 2022. Payments of interest on long-term debt were $0.0 million, $0.0 million and $0.0 million in 2023, 2022 and 2021, respectively.

The net cash outflows in respect of refinancing costs were $1.4 million, $0.0 million and $0.0 million in 2023, 2022 and 2021, respectively.