ACHESON, Alberta, Oct. 10, 2017 (GLOBE NEWSWIRE) -- ENTREC Corporation (TSX: ENT ) (“ ENTREC ” or the “ Company ”), a heavy haul transportation and crane solutions provider, today announced a 5 year extension to its senior secured asset-based credit facility (the “ ABL Facility ”) with a syndicate of lenders led by Wells Fargo Capital Finance Corporation Canada. The syndicate of lenders also includes Bank of Nova Scotia, Canadian Western Bank and Toronto-Dominion Bank.
“We are very pleased to continue our strategic relationship with Wells Fargo and our other banking partners,” said Jason Vandenberg, ENTREC’s Chief Financial Officer. “This extension provides long-term stability to our equipment financing needs and provides us the financial flexibility we need to execute on our growth strategies over the coming years.”
The ABL Facility now matures on October 10, 2022 and will continue to require payments of interest only. Along with the extension, a number of amendments were made to the ABL Facility, including, among other items:
- A voluntary reduction in the ABL Facility to $172.5 million from $240 million previously, which will result in lower stand-by fees;
- The removal of the accordion feature to increase the ABL Facility by a further $75 million;
- Revisions to the sliding scale pricing levels. These revisions will generally result in a 75 basis point increase in the interest rate applicable at each pricing level;
- Elimination of the springing senior leverage ratio covenant, which was replaced with a springing fixed charge coverage ratio (“ FCCR ”) covenant of 1.0x. The FCCR covenant will only apply should ENTREC’s excess borrowing capacity decline to an amount below the lesser of (i) 12.5% of ENTREC’s total borrowing capacity or (ii) 12.5% of ENTREC’s total ABL Facility of $172.5 million. At August 31, 2017, ENTREC’s excess borrowing capacity of $31.5 million exceeded this threshold. At August 31, 2017, ENTREC FCCR, as defined in the credit agreement, was 1.26x;
- A requirement to maintain a minimum excess borrowing capacity of $15.0 million at all times; and
- A requirement that ENTREC’s convertible debentures due June 30, 2021 be repaid or extended prior to March 31, 2021. If the convertible debentures are not repaid or extended prior to March 31, 2021, the maturity date of the ABL Facility will also be March 31, 2021.
About ENTREC
ENTREC is a heavy haul transportation and crane solutions provider to the oil and natural gas, construction, petrochemical, mining and power generation industries. ENTREC is listed on the Toronto Stock Exchange under the symbol ENT .
Forward-looking Statements
This press release contains forward-looking statements which reflect ENTREC’s current beliefs and are based on information currently available to ENTREC. These statements require ENTREC to make assumptions it believes are reasonable and are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond ENTREC's control.
Examples of forward-looking statements in this press release and the key assumptions and risk factors involved in such statements include, but are not limited to, ENTREC’s anticipation that the extended facility will provide long-term stability to ENTREC’s equipment financing needs and provide financial flexibility to execute on its growth strategies. This anticipation is dependent on a number of assumptions and risk factors, including ENTREC’s ability to meet or exceed its future earnings and cash flow targets and the Company’s ability to maintain compliance with its debt covenant and other requirements contained within the ABL Facility. A failure to comply with the obligations in the ABL Facility could result in a default which, if not cured or waived, could result in an acceleration of the ABL Facility’s repayment. If repayment of the ABL Facility were to be accelerated, there can be no assurance that ENTREC’s assets would be sufficient to repay in full that indebtedness.
Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected effects on ENTREC. These forward-looking statements are made as of the date of this press release. Except as required by applicable securities legislation, the Company assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.
For further information, please contact:
John M. Stevens - President & CEO Telephone: (780) 960-5625
Jason Vandenberg – CFO Telephone: (780) 960-5630
