Savanna Announces The Renewal and Extension of its Senior Credit Facility and Amendments to Financial Covenants
April 17, 2015
Savanna Energy Services Corp. (“Savanna” or “the Company”) announces that Savanna’s syndicate of lenders have approved the renewal and extension of its senior secured credit facility and amendments to the financial covenants related thereto. The renewal, extension, and financial covenant amendments provide Savanna with increased financial flexibility amidst the prevailing uncertain market conditions.
Savanna’s senior secured revolving credit facility remains comprised of a $220 million Canadian syndicated facility, a $10 million Australian facility, and a $20 million Canadian operating facility. In addition, as part of the renewal, Savanna retained an available $50 million accordion, which it can request as an increase to the total available facility. The entire $250 million facility is for a committed four-year term and, based on the renewal, all drawn amounts are now due in May 2019. The credit facility has maintained an earlier maturity date of January 25, 2018 if Savanna’s $175 million senior unsecured notes are not repaid or refinanced on terms acceptable to the lenders by that date. The credit facility does not require any mandatory principal payments prior to maturity and can be further extended beyond May 2019 with the consent of the lenders.
The senior secured revolving credit facility had established financial covenants including Total Funded Debt to EBITDA (twelve-month trailing) at or below 4.0:1. In response to the precipitous drop in crude oil prices, our lenders have agreed to revise the Total Funded Debt to EBITDA financial covenant to the following:
- For the quarter ending September 30, 20154.50:1
- For the quarter ending December 31, 20155.25:1
- For the quarter ending March 31, 20165.25:1
- For the quarter ending June 30, 20165.00:1
- For the quarter ending September 30, 20165.00:1
- For the quarter ending December 31, 20164.50:1
In addition, with respect to the determination of twelve-month trailing EBITDA for the purpose of calculating the Company’s financial debt covenants, Savanna’s lenders have agreed to allow the add back of non-recurring cash charges of up to $7.5 million for employee severance costs incurred in 2015 but not beyond the December 31, 2015 reporting period. All other terms and conditions relating to financial covenants contained in the senior secured credit facility remain unchanged.
EBITDA, for the purpose of calculating the Company’s financial debt covenants, is determined as earnings before finance expenses, income taxes, depreciation, amortization, share-based compensation, and certain non-cash income and expenses as defined in the credit agreement and excludes amounts from certain non-guarantor subsidiaries and the limited partnerships partially owned by the Company.
Total Funded Debt, for the purpose of calculating the Company’s financial debt covenants, is determined as total long-term debt, including the current portions thereof but excluding the limited partnership facilities, plus certain other obligations identified in the credit agreement, including but not limited to, any outstanding amounts under the Company’s Canadian operating facility or U.S. unsecured line of credit, and any outstanding letters of credit.
For further information contact:
Savanna Energy Services Corp.
Interim President and CEO
Executive Vice-President and CFO
Tel: (403) 503-9990