Big day tomorrow - meeting!!and News regarding senior revolving credit facility post acquisition...
cheers!
SECURE Energy Increases Senior Secured Revolving Credit Facility and Announces New Letter of Credit Facility
CALGARY, AB, June 14, 2021 /CNW/ - SECURE Energy Services Inc. ("SECURE", the "Corporation") (TSX: SES) today announced that it has entered into a binding agreement with its syndicate of lenders to increase the size of the previously announced senior secured revolving credit facility available at closing of the business combination with Tervita Corporation ("Tervita") from $725 million to $800 million .
On March 8, 2021, SECURE and Tervita entered into an arrangement agreement to combine in an all-share transaction, creating a stronger midstream infrastructure and environmental solutions business (the "Transaction"). The combined company will operate as SECURE and remain listed on the Toronto Stock Exchange ("TSX") as TSX: SES.
SECURE has commitments from nine financial institutions and Chartered Banks to provide the combined company with financing by way of an $800 million three-year credit facility (the "Credit Facility"), subject to the satisfaction of certain conditions precedent. The Credit Facility will be utilized to replace and repay SECURE's existing first and second lien credit facilities and Tervita's first lien credit facility. Tervita's second lien notes will remain outstanding and enable capital structure optimization while maintaining adequate liquidity. The effectiveness of the Credit Facility will itself be subject to certain financial covenants, liquidity criteria and customary conditions being met, including completion of the Transaction. It is anticipated that each of the conditions to the effectiveness of the Credit Facility, other than the proposed amalgamation of SECURE and Tervita, will be satisfied prior to completion of the Transaction.
"The increase to the Credit Facility that will be in place upon completion of our merger with Tervita provides enhanced financial flexibility for the combined company," said Chad Magus, Chief Financial Officer. "We appreciate the support of our lenders and look forward to our continued relationship."
As previously stated, SECURE will continue to focus on debt repayment following the closing of the Transaction to achieve the combined company's target debt to EBITDA ratio of less than 2.5x, which is expected to be achieved within two years of closing of the Transaction.
SECURE is also pleased to announce that it has a binding commitment for a new $30 million unsecured letter of credit facility guaranteed by Export Development Canada (the "LC Facility"), providing additional stability and capacity to the company's capital structure. SECURE had issued letters of credit in the amount of approximately $37 million at March 31, 2021 . Any letters of credit issued above the capacity of the LC Facility are expected to reduce the amount available to be drawn under the Credit Facility following completion of the Transaction.
Special Meeting of Shareholders
On June 15, 2021 , SECURE and Tervita will each hold special meetings of shareholders virtually, via live webcasts, with SECURE's shareholders and Tervita's securityholders voting on respective resolutions in connection with the Transaction (the "Meetings").
Further information on how to attend the Meetings, along with voting instructions for shareholders of record on May 4, 2021 , were included in the joint information circular of SECURE and Tervita dated May 6, 2021 (the "Joint Information Circular") which was delivered to the applicable securityholders and filed on SEDAR at www.sedar.com on May 11, 2021 .