Petrowest announces amended and restated syndicated credit facility
CALGARY, April 1, 2016 /CNW/ - Petrowest Corporation ("Petrowest") (TSX:PRW) announced today that it has entered into an amendment and restatement of its credit facility with its syndicate of lenders, led by Bank of Montreal (the "Amended and Restated Credit Agreement"). Lloyd Wiggins, Petrowest's Chief Financial Officer, said "following the award of our largest project since inception, we are delighted by the continuing support from our lenders, which speaks to the transformational year Petrowest anticipates going into 2016 and beyond".
At March 31, Petrowest has approximately $30.1 million drawn on its amortizing term loan and approximately $17 million drawn on its $40 million syndicated revolving credit facility. Entering 2016, Petrowest has invested capital through 2015 to position the Company for a strong Adjusted EBITDA growth year, which provides the ability to decrease its revolving amortizing term loan from $50 million to $35 million, reducing the overall commitment amount from $90 million to $75 million.
The Amended and Restated Credit Agreement includes, among other things, modified financial covenants, including:
| Covenant |
Former Requirement |
Revised Requirement |
||
| Senior Funded Debt to |
not greater than: (i) 3.25:1 to March 31, 2016, (ii) 2.50:1 from April 1, 2016. |
not greater than: (i) 4.75:1 to June 30, 2016, (ii) 5.75 from July 1, 2016 to December 30, 2016, (iii) 3.25 by December 31, 2016, (iv) 3.00:1 from January 1, 2017 to September 30, (v) 2.50:1 from October 1, 2017 onwards. |
||
| Total Funded Debt to |
not greater than: (i) 4.00:1 to March 31, 2016, (ii) 3.25:1 from April 1, 2016. |
not greater than: (i) 6.00:1 to March 31, 2016, (ii) 5.50:1 from April 1, 2016 to June 30, 2016, (iii) 6.75:1 from July 1, 2016 to December 30, (iv) 4.00:1 by December 31, 2016, (v) 3.50:1 from March 31, 2017 to September 30, (vi) 3.00 from December 31, 2017 onwards. |
||
| Consolidated Fixed Charge |
not less than: (i) 1.05:1 to June 30, 2016, (ii) 1.10:1 from July 1, 2016 to (iii) 1.25:1 from October 1, 2016. |
not less than: (i) waived through December 31, 2016, (ii) 1.05:1 from March 31, 2017 to June 30, 2017, (iii) 1.15:1 from July 1, 2017 to September 30, (iv) 1.20:1 from October 1, 2017 to December 31, (v) 1.25:1 from January 1, 2018 onwards. |
||
| Adjusted EBITDA |
none for 2016 |
not less than: (i) $1,760,933 for the first quarter of 2016, (ii) $3,349,524 for the second quarter of 2016, (iii) $8,418,166 for the third quarter of 2016, (iv) $6,202,927 for the fourth quarter of 2016. |
||
| Unfinanced Capital |
not greater than $13 million |
not greater than $10 million |
||
| Notes: |
|
| (1) |
The ratio of Senior Funded Debt at the end of the most recently completed fiscal quarter of Petrowest to the Adjusted EBITDA for the most recently completed consecutive four fiscal quarters of Petrowest. "Senior Funded Debt" means the total of the Syndicated Credit Facility plus Other long-term debt plus finance lease liabilities. "Adjusted EBITDA" means the consolidated net income for the Company before the deduction of interest, taxes, amortization and non-cash items (such as non-cash share based compensation and gains or losses on asset dispositions). The covenants exclude the financial results from the Peace River Hydro Partners on the Site C main civil contract award. |
| (2) |
The ratio of Total Funded Debt at the end of the most recently completed fiscal quarter of Petrowest to the Adjusted EBITDA for the most recently completed consecutive four fiscal quarters of Petrowest. "Total Funded Debt" means the aggregate total of the Senior Funded Debt and the Subordinated Debt (defined below). The covenants exclude the financial results from the Peace River Hydro Partners on the Site C main civil contract award. |
| (3) |
The ratio of Adjusted EBITDA (minus the amount of unfunded capital expenditures of Petrowest and any distributions made by Petrowest) to all principal and interest payments payable in respect of any indebtedness of Petrowest (including the current portion of Petrowest's long term debt, plus any taxes payable by Petrowest over the last 12 month period). The covenants exclude the financial results from the Peace River Hydro Partners on the Site C main civil contract award. |
| (4) |
"Unfinanced Capital Expenditures" means 100% of capital expenditures less third party capital contributed for the specific purposes of financing those capital expenditures, less new third party debt advanced for the purpose of financing. The covenant applies to the fiscal year. |
In addition to the revisions to the financial covenants noted above, Petrowest has agreed to maintain 10% of excess availability under the revolving credit facility at all times based on the monthly borrowing base report, and has confirmed its aggregate financial support to Peace River Hydro Partners ("PRHP") will be less than $1.5 million.
Petrowest anticipates a strong year of Adjusted EBITDA growth, and will be focused on decreasing the outstanding balance on the amortizing term loan throughout the year. The Company will not be drawing additional capital from the amortizing term loan until the Senior Funded Debt to Adjusted EBITDA ratio is not greater than 2.50:1.00.
The Senior Funded Debt to Adjusted EBITDA Ratio, Total Funded Debt to Adjusted EBITDA Ratio and Consolidated Fixed Charge Coverage Ratio financial covenants under Petrowest's subordinated debt agreement have been removed and a minimum Adjusted EBITDA covenant has been added requiring 2016 Adjusted EBITDA, on a trailing twelve month basis, of not less than $14,062,964 in the first quarter of 2016 and $15,132,425 in the second quarter of 2016 (in each case excluding the financial results from the Peace River Hydro Partners on the Site C main civil contract award), $21,951,830 in the third quarter of 2016 and $34,731,550 in the fourth quarter of 2016, 2017 Adjusted EBITDA in each quarter of not less than $35 million, on a trailing twelve month basis, and 2018 Adjusted EBITDA in the first and second quarters of not less than $35 million, on a trailing twelve month basis.
FORWARD LOOKING INFORMATION
Certain information and statements contained in this news release constitute forward-looking information, including the anticipated strong year of Adjusted EBITDA and a focus on decreasing the outstanding balance on the amortizing term loan throughout the year. Readers should review the cautionary statement respecting forward-looking information that appears below. Any forward-looking statements are made as of the date hereof and Petrowest does not undertake to publicly update and review such statements to reflect new events, subsequent events or otherwise, except to the extent events and circumstances have occurred that are reasonably likely to cause actual results to differ materially from material forward-looking information for a period that is not yet complete or as otherwise required by law.
The information and statements contained in this news release that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Forward-looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as changes in industry conditions (including the levels of capital expenditures made by government agencies and companies undertaking infrastructure projects and oil and gas explorers and producers), the credit risk to which Petrowest is exposed in the conduct of its business, fluctuations in prevailing commodity prices or currency and interest rates, the competitive environment to which the various business divisions are, or may be, exposed in all aspects of their business, the ability of Petrowest's various business divisions to access equipment (including parts) and new technologies and to maintain relationships with key suppliers, the ability of Petrowest's various business divisions to attract and maintain key personnel and other qualified employees, various environmental risks to which Petrowest's business divisions are exposed in the conduct of their operations, inherent risks associated with the conduct of the businesses in which Petrowest's business divisions operate, timing and costs associated with the acquisition of capital equipment, the impact of weather and other seasonal factors that affect business operations, availability of financial resources or third-party financing and the impact of new laws or changes in administrative practices on the part of regulatory authorities. Forward-looking information respecting Adjusted EBITDA for 2016 and a focus on decreasing the outstanding balance on the amortizing term loan throughout the year is based on the current budget of Petrowest (which is subject to change), factors that affected the historical growth of Petrowest's business divisions, sources of historic growth opportunities and expectations relating to future economic and operating conditions including, without limitation, anticipated future growth opportunities.
Although management of Petrowest believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this news release. All of the forward looking statements of Petrowest contained in this news release are expressly qualified, in their entirety, by this cautionary statement. The various risks to which Petrowest is exposed are described under "Risk Factors" in Petrowest's Annual Information Form, available under Petrowest's profile on the SEDAR website at www.sedar.com.
ABOUT PETROWEST
Petrowest is an Alberta corporation involved in both industrial and civil infrastructure projects, as well as pre-drilling and post-completion energy services, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in northwestern Alberta and northeastern British Columbia.
SOURCE Petrowest Corporation
please contact Nikolaus Kiefer, Vice President of Business Development & Investor Relations at (403) 384-0405 or [email protected]
Share this article