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.
Primary Amendments
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.
Financial Covenants
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.
Financial Position
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.”
https://www.globenewswire.com/en/news-release/2021/11/26/2341299/0/en/Essential-Energy-Services-Announces-Extension-And-Amendment-of-Its-Credit-Facility.html