Forum amends revolver to reduce commitments, update leverage ratio

By Marisa Wong

Morgantown, W.Va., Dec. 12 – Forum Energy Technologies, Inc. said it amended its revolving credit facility to permit netting of its currently significant cash balances against senior secured debt for the leverage ratio covenant.

This provides improved borrowing flexibility for funding growth initiatives, including acquisitions, as the energy industry enters the early stages of a recovery, the company said in a press release.

Specifically, the company amended its credit agreement to reduce lender commitments to $140 million from $200 million, decreasing annual commitment fees by $225,000, with an ability to increase the facility by $150 million.

The maximum senior secured leverage ratio as of the end of each quarter is now 4.5 to 1.0 through Dec. 31, 2017 and 3.5 to 1.0 after that.

Under the amendment, cash and cash equivalent netting against senior secured debt for the senior secured leverage ratio covenant is effective through Dec. 31, 2017.

The amendment also puts a restriction on borrowing funds, other than for acquisitions, if domestic cash and cash equivalents exceed a threshold amount.

The maturity date of November 2018 was not changed.

As of Sept. 30, the company had no borrowings outstanding under the credit facility, $17.3 million of outstanding letters of credit and the capacity to borrow an additional $99 million.

In addition, at Sept. 30 the company had cash and cash equivalents of $132.5 million and total debt of $396.5 million. After giving effect to the amendment, the company has the capacity to borrow about $104 million.

“We are pleased with the continued support of our bank group. This amended credit facility, when combined with proceeds from our recent equity offering, provides flexibility and increased liquidity to take maximum advantage of opportunities during the up-cycle,” James Harris, Forum’s chief financial officer, said in the press release.

Forum is an oilfield products company, based in Houston.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.