Essential Energy Services Announces Extension And Amendment of Its Credit Facility
CALGARY, Alberta, Nov. 25, 2021 (GLOBE NEWSWIRE) -- Essential Energy Services Ltd. (TSX: ESN) (“Essential” or the “Company”) announces it has entered into the second amending agreement to its June
26, 2018 credit facility agreement (together with the first amending agreement, the “Amended Credit Facility”) with a syndicate of lenders comprised of National Bank of Canada, ATB Financial and
Canadian Western Bank (the “Lenders”). The Amended Credit Facility provides Essential an extension of the maturity date of the revolving secured credit facility to November 30, 2024, along with
amendments to certain terms and conditions.
The primary changes in the Amended Credit Facility include:
- Extension of the maturity date from June 30, 2022 to November 30, 2024.
- The amount available to be borrowed is $25 million. Prior to this amendment, the amount that could be borrowed was the lesser of (a) $25 million; (b) $15 million during the covenant relief period, which was scheduled to end on December 31, 2021; and (c) the borrowing base calculation. The covenant relief period and related restrictions along with the borrowing base calculation have been removed.
- Distributions, in the form of dividends or a normal course issuer bid, are now permitted provided no pending event of default or event of default, as defined in the
Amended Credit Facility, is continuing or would result from such distribution.
The financial covenants include:
- The funded debt to capitalization ratio cannot exceed 50%.
- The funded debt to EBITDA ratio cannot exceed 3.5x.
- The fixed charge coverage ratio must not be less than 1.25x.
The covenant calculation terms are as defined in the Amended Credit Facility.
On November 25, 2021, Essential had no long-term debt outstanding and a cash balance of $7.6 million.
“With this cash balance, Essential is in a very strong financial position,” said Garnet Amundson, President and CEO. “Essential’s ongoing cash positive position is a strategic advantage as the industry transitions into a period of expected growth. The Amended Credit Facility continues to provide Essential with financial flexibility to support its operations. We thank the Lenders for their support and commitment to Essential.”
FORWARD LOOKING STATEMENTS
This news release contains “forward-looking statements” and “forward-looking information” (collectively referred to herein as “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “continues”, “projects”, “potential”, “budget” and similar expressions, or are events or conditions that “will”, “would”, “may”, “could” or “should” occur or be achieved. This news release contains forward-looking statements pertaining to the outlook for industry activity, Essential’s cash positive position being a strategic advantage and the financial flexibility provided by the Amended Credit Facility.