Flotek suspends, adds, changes covenants; interest raised by 100 bps

By Wendy Van Sickle

Columbus, Ohio, May 3 – Flotek Industries, Inc. entered an amendment Monday to its amended and restated revolving credit, term loan and security agreement dated May 10, 2013 with PNC Bank, NA that increased the interest rate on all advances by 100 basis points and adjusted some covenants, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the financial covenants to maintain a fixed-charge coverage ratio and a ratio of funded debt to adjusted EBITDA were suspended until June 30, 2017, and a requirement to maintain certain minimum adjusted EBITDA levels for the periods ending Sept. 30, 2016, Dec. 31, 2016 and March 31, 2017 was established.

Additionally, the company is required to maintain a minimum monthly average undrawn availability of $10 million, including a requirement to continuously maintain $5 million of undrawn availability until June 30, 2017, and its capital expenditure limit for 2016 was reduced to about $25 million.

The margin over Libor now ranges from 250 bps to 300 bps for revolver borrowings and from 325 bps to 375 bps for term loans, each depending on availability.

Flotek is a Houston-based developer and distributor of oilfield technologies, including specialty chemicals and down-hole drilling and production equipment.

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