Hudson Enters New Deal with Lenders & Extends Runway – Thesis is Intact $HDSN

Hudson Technologies (HDSN) just filed an 8-k stating it entered a new revolver with Wells Fargo ($60MM of borrowing capacity) and terminated its one with PNC. It also received a waiver for its covenant default through December 2021. This is big news. This will surely buy the company time and allow for the refrigerant market to turn around.

 

“The Fourth Amendment waived financial covenant defaults at June 30, 2019 and September 30, 2019 and amended the Term Loan Credit and Security Agreement to reset the maximum total leverage ratio financial covenant through December 31, 2021; reset the minimum liquidity requirement; and added a minimum LTM adjusted EBITDA covenant”

If the market does turnaround, then I think Hudson’s stock will move much higher than where it stands today as (i) the market realizes the company is not going bankrupt and (ii) it earns much higher earnings from increased pricing of R-22. As stated before, I don’t think the lenders want to bankrupt the company as long as it can stay current on interest.

Stay tuned.

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