Bank and Other Borrowings

6 Months Ended

Jun. 30, 2023

Bank And Other Borrowings [Abstract]

9. BANK AND OTHER BORROWINGS

As of June 30, 2023 and December 31, 2022, the current portion of bank and other borrowings amounts to $12.9 million and $15.4 million, respectively. As of June 30, 2023, this item was comprised of $9.4 million of the current portion of bank and other borrowings and $3.5 million of credit line facilities. As of December 31, 2022, this item was comprised of $11.4 million of the current portion of bank and other borrowings and $4.0 million of credit line facilities.

Credit line facilities

As of June 30, 2023, the Company had credit line facilities denominated in Euro for a total amount of $5.4 million, of which $3.5 million had been used. As of December 31, 2022, the Company had credit line facilities denominated in Euro for $5.4 million, of which $4.0 million had been used.

The credit lines denominated in Euro may be drawn upon at variable interest rates in the following range: 1.00% - 4.60%. The weighted average interest rate on those credit line facilities outstanding as of June 30, 2023 was 1.39%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):


									Interest Nominal Rate
	As of June 30,		As of December 31,			Interest Contractual Rate			As of June 30,			As of December 31,
	2023		2022		Maturity	as of March 31, 2023			2023			2022
UniCredit S.p.A. (Line A Tranche 1)	$	320	$	943	July 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche 2)		27		53	November 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A. (Line B)		898		1,324	May 2024	Euribor 3 months + 2.90%				2.60	%		2.60	%
UniCredit S.p.A. (Line C)		258		755	August 2023	Euribor 3 months + 3.90%				7.48	%		6.03	%
Intesa Sanpaolo S.p.A. (Line 2)		1,131		1,654	April 2024	Euribor 3 months + 3.10%				6.68	%		5.23	%
Intesa Sanpaolo S.p.A. (Line 3)		6,450		7,927	June 2026	Euribor 3 months + 2.15%				5.73	%		4.28	%
Intesa Sanpaolo S.p.A. (Line 4)		3,958		4,466	July 2026	Euribor 3 months + 2.20%				5.78	%		4.33	%
Monte dei Paschi di Siena S.p.A. (Line 2)		—		356	June 2023		1.50	%		1.50	%		1.50	%
Banco BPM S.p.A. (Line 1)		—		189	June 2023	Euribor 3 months + 2.00%				5.58	%		4.13	%
Banco BPM S.p.A. (Line 3)		2,255		3,059	September 2024	Euribor 3 months + 3.00%				6.58	%		5.13	%
Banco BPM S.p.A. (Line 4)		2,071		2,491	July 2025	Euribor 3 months + 1.95%				5.53	%		4.08	%
Simest 1		91		134	December 2023		0.50	%		0.50	%		0.50	%
Simest 2		90		133	December 2023		0.50	%		0.50	%		0.50	%
Simest 3		166		244	December 2023		0.50	%		0.50	%		0.50	%
Simest 4		1,168		1,150	April 2027		0.50	%		0.50	%		0.50	%
Total bank and other borrowings		18,883		24,878
Less: current portion		9,389		11,419
Total long-term portion	$	9,494	$	13,459

All bank and other borrowings are unsecured borrowings of the Company.

On April 15, 2021, the Company entered into a general unsecured loan agreement with Simest S.p.A for a total of $3.6 million (€3.0 million at the April 15, 2021 exchange rate) relating to the Fund 394/81 (the “Simest Financing”) and Fund for Integrated Promotion (the “Co-financing”) for implementation of a program to break into foreign markets. The principal amount of $3.1 million (€2.6 million at the April 15, 2021 exchange rate) applies to the Simest Financing. The Simest Financing bears a subsidized interest rate of 0.055% and a reference interest rate of 0.55%. The loan has a duration of six (6) years starting from the date of disbursement and is to be repaid in half-yearly installments starting after a two-year pre-amortization period. The principal amount of $505,000 (€422,000 at the April 15, 2021 exchange rate) of the financing applies to the Co-financing and was granted in accordance with Section 3.1 of the Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak of the European Commission, and as such is non-refundable as long as the funds are used for the purposes stated within the Framework.

On September 15, 2021, the principal amount of $1.3 million (€1.1 million at the September 15, 2021 exchange rate) and $208,000 (€176,000 at the September 15, 2021 exchange rate) relating to the first installment of the Simest Financing (“Simest 4”) and Co-financing, respectively, was disbursed to the Company pursuant to the terms of the loan agreement with Simest S.p.A. The non-refundable Co-financing principal amount will be assessed under Section 3.1 of the Framework and will be accounted in the condensed consolidated statement of operations within the 25-month period of the agreement execution date.

On July 28, 2022, the Company entered into a new unsecured loan agreement with Banco Popolare di Milano S.p.A. for a total principal amount of $2.5 million (€2.5 million at the July 28, 2022 exchange rate) with a duration of 36 months and bearing interest rate equal to Euribor 3 months + 1.95%.

As of June 30, 2023, all of the available long-term facilities were drawn in full except for the Simest Financing and Co-financing, as described above.

The above facilities include a series of statements and disclosure obligations, in line with the standard practice for these types of financings, whose breach could result in termination, early repayment or enforcement of acceleration rights. In addition, some of the above facilities require compliance with certain financial covenants, based on Kaleyra S.p.A.’s EBITDA, net financial position and equity, calculated upon the approved audited statutory financial statements of Kaleyra S.p.A. Failure to comply with those financial covenants may result in the repayment of the outstanding debt under the relevant facility or the increase in the interest rate bearing on the existing financing agreements. As of December 31, 2022, the Company was in compliance with all the financial covenants.

Interest expense on bank and other borrowings was $275,000 and $133,000 for the three months ended June 30, 2023 and 2022, respectively.

Interest expense on bank and other borrowings was $524,000 and $289,000 for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the Company is obliged to make payments as follows (in thousands):


	As of June 30, 2023
2023 (remaining six months)	$	5,129
2024		7,026
2025		4,277
2026		2,307
2027		144
2028 and thereafter		—
Total	$	18,883

Kaleyra, Inc. 10-Q