TORONTO, Dec. 06, 2016 (GLOBE NEWSWIRE) -- Shawcor Ltd. (TSX:SCL) is announcing today that it has entered into amending agreements with its Senior Note holders and the syndicate of lenders under its bank credit facility (the “Credit Facility”). The principal amendments to the previously existing agreements with the Senior Note holders and to the Credit Facility are:
a) an extension of the term of the Credit Facility from March 20, 2018 to December 6, 2019 and a reduction in the size of the Credit Facility from US$325 million to US$317 million;
b) the elimination of the requirement for the Company to meet a Total Debt to EBITDA covenant (the “Leverage Ratio”) for the quarter ending December 31, 2016 (“Q4 2016”);
c) the creation of a minimum EBITDA covenant of C$15 million in respect of Q4 2016;
d) an increase in the maximum Leverage Ratio to 3.50 to 1.00 and 3.25 to 1.00 for the quarters ending March 31, 2017 (“Q1 2017”) and June 30, 2017 (“Q2 2017”), respectively; with EBITDA for Q1 2017 to be calculated by multiplying the EBITDA for such quarter by 4 and with EBITDA for Q2 2017 to be calculated by adding the EBITDA for Q1 2017 and the EBITDA for Q2 2017 and then multiplying such sum by 2;
e) a decrease in the minimum Interest Coverage Ratio/Fixed Charge Ratio (currently 2.5 to 1.0) to 1.5 to 1.0 for Q4 2016;
f) an amendment to the method of calculation of the Interest Coverage Ratio/Fixed Charge Ratio for Q1 2017 and Q2 2017 such that each of the components of such ratio (EBITDA, interest expense and rental payments) is calculated on a basis similar to the calculation of the Leverage Ratio for such quarters; and
g) increased interest rates and standby and other fees payable to Senior Note holders and under the Credit Facility during Q4 2016 and in any period when the Company is permitted an increased Leverage Ratio.
Shawcor is also announcing today that it will utilize a portion of its available Credit Facility to repurchase US$75 million of its Senior Notes on December 12, 2016 at a price of US$75 million. Following that repurchase, Shawcor will have approximately US$196.8 million in Senior Notes outstanding, approximately C$135.5 million in cash and cash equivalents and approximately C$228.4 million of unutilized credit facilities (net of standard letters of credit for performance, bid and other bonds of approximately C$93 million). The Company will incur fees and expenses of approximately US$2.1 million in Q4 2016 to implement these amendments and the extension of the Credit Facility.
For further information regarding the Senior Note and Credit Facility amendments, please see the text of the amendments filed at www.sedar.com.
Shawcor is a global energy services company specializing in products and services for the pipeline and pipe services segment of the oil and gas industry and related products for petrochemical and industrial markets. The Company operates through a global network of fixed and mobile manufacturing and service facilities and is valued for its integrity, technology and proven capability to execute the most complex projects in our industry.
This news release contains forward-looking information within the meaning of applicable securities laws. This forward looking information is based on assumptions, estimates, and analysis made in the light of the Company’s experience and its perception of trends, current conditions and expected developments, as well as other factors that are believed by the Company to be reasonable and relevant in the circumstances. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from those predicted, expressed, or implied by the forward-looking information. The forward-looking information is provided as of the date of this news release and the Company does not assume any obligation to update or revise the forward-looking information to reflect new events or circumstances, except as required by law.