Shawcor Announces Amendment to Its Credit Facility

TORONTO, July 29, 2020 (GLOBE NEWSWIRE) -- Shawcor Ltd. (TSX: SCL) announced today that it has entered into an amending agreement with its existing syndicate of lenders under its credit facility that provides covenant relief through December 31, 2021. 

Steve Orr, Chief Executive Officer of Shawcor commented “The confidence and support of the Company’s lender partners made this amendment possible. With the amendment finalized, a very important element is in place that will assist Shawcor in managing through near term uncertainty, executing on its strategy through 2021 and beyond, and remaining an industry leader”.

As previously announced on June 25, 2020, all lenders in Shawcor’s banking syndicate had waived compliance with the leverage and interest coverage ratios under the credit facility for Shawcor’s second fiscal quarter ending June 30, 2020 should Shawcor be in default thereof.

The principal amendments to the credit facility are:

1. a waiver of the maximum Net Debt to EBITDA covenant (the “Leverage Ratio”) for the fiscal quarter ended September 30, 2020 (“Q3 2020”) and a change in the maximum Leverage Ratio to:
   -  5.75 to 1.00 for the fiscal quarter ended December 31, 2020 (“Q4 2020”)
   -  6.50 to 1.00 for the fiscal quarter ended March 31, 2021 (“Q1 2021”)
   -  5.75 to 1.00 for the fiscal quarter ended June 30, 2021 (“Q2 2021”)
   -  5.50 to 1.00 for the fiscal quarter ended September 30, 2021 (“Q3 2021”)
   -  5.00 to 1.00 for the fiscal quarter ended December 31, 2021 (“Q4 2021”)
   -  3.50 to 1.00 for all fiscal quarters thereafter;
    
2. a waiver of the minimum EBITDA to Interest covenant (the “Interest Coverage Ratio”) for Q3 2020 and a change in the minimum Interest Coverage Ratio to:
   -  2.25 to 1.00 for Q4 2020
   -  2.00 to 1.00 for Q1 2021
   -  2.25 to 1.00 for Q2 2021
   -  2.50 to 1.00 for Q3 2021
   -  2.75 to 1.00 for Q4 2021
   -  3.00 to 1.00 for all fiscal quarters thereafter;
    
3. for the purposes of the amended Leverage Ratio and Interest Coverage Ratio, EBITDA shall be calculated as follows:
   -  for Q4 2020: (Q4 2020 EBITDA) x 4
   -  for Q1 2021: (Q4 2020 EBITDA + Q1 2021 EBITDA) x 2
   -  for Q2 2021: (Q4 2020 EBITDA + Q1 2021 EBITDA + Q2 2021 EBITDA) x 4/3
   -  thereafter, on a trailing 12 month basis;
    
4. until receipt by the banking syndicate of reporting for the period ended December 31, 2020, the addition of a minimum monthly liquidity test, calculated as aggregate unrestricted cash held in lender’s accounts plus undrawn availability under the credit facility, of $290 million;