DIVERGENT Energy Services Announces a Financial Update
CALGARY, Alberta, Oct. 01, 2020 (GLOBE NEWSWIRE) -- DIVERGENT Energy Services Corp. (“Divergent”, the "Company",
or “DVG”) (DVG: TSX-V) is pleased to announce an update on its financial position.
As highlighted in our Investor Presentation for the Annual General Meeting held on June 25, 2020 (available on our website: www.divergentenergyservices.com), a strategic transformation is underway to address the financial challenges facing the Company. Improving the working capital ratio is fundamental to the Company’s ability to access growth capital. A key first step is to negotiate the conversion of certain current liabilities into manageable long-term debt the repayment of which coincides with the Company’s expected cash flows.
In this regard, the Company and its primary inventory supplier have entered into an agreement to convert an existing current liability of USD $2 million into a long-term, subordinated secured promissory note (“Note”). The Note has a 4-year term, an interest rate of 10% per annum, and quarterly payments commencing on September 30, 2020. To accommodate near-term cash flow expectations, interest payments in the earlier years are deferred. Payments of principal and interest gradually increase over the term of the Note, with principal payments of US$175,000 being due within the first year. The subordinated security is specific to identified inventory that has been received from the supplier and has become slow moving. The agreement is critical to stabilizing Divergent’s business and supporting the anticipated growth in operations during the four-year term of the Note. It also allows sufficient time for the Company (and the industry) to regain its footing following the recent downturn in the business environment.
For Further Information:
Ken Berg, President and Chief Executive Officer, firstname.lastname@example.org
Lance Mierendorf, Interim Chief Financial Officer, email@example.com
ABOUT DIVERGENT ENERGY SERVICES CORP.
Headquartered in Calgary, Alberta, Divergent provides Artificial Lift products and services that are used in the oil and gas industry. Product lines including Electric Submersible Pumps, Electric Submersible Progressing Cavity Pumps, and the future development of an Electromagnetic Pump technology.
DIVERGENT Energy Services Corp., 2020, 715 – 5th Ave SW, Calgary, AB T2P 2X6, (403) 543-0060, (403) 543-0069 (fax), www.divergentenergyservices.com