High Arctic Energy extends credit facility by two years to 2023

Chicago, Oct. 15 – High Arctic Energy Services Inc. announced that it has extended its credit facility with HSBC by two years, according to a company press release.

The facility now matures on Aug. 31, 2023 with enhanced flexibility and similar underlying financial covenants and borrowing capacity.

High Arctic has drawn C$10 million of the C$45 million revolver.

The terms continue to stipulate that funded debt to EBITDA shall not exceed 3x and the EBITDA to interest expense ratio should stay below 3x.

The facility can be renewed with the lender’s consent and is secured by a general security agreement over the corporation’s assets.

The calculation of the corporation’s borrowing base remains unchanged and is limited to 60% of the net book value of the Canadian fixed assets plus 85% of investment-grade receivables, 75% of acceptable accounts receivable, plus 90% of insured receivables; less priority payables as defined in the credit facility agreement.

The bank defined EBITDA covenant now includes an add back of restructuring costs up to C$1 million in any given trailing 12-month period.

The new arrangement also includes a backstop feature that provides C$5 million availability in the event the above two financial covenants are not met.

Proceeds, with the company’s existing cash balance of C$33.5 million as of June 30, will provide additional liquidity for both future operating and capital requirements.

High Arctic is based in Red Deer, Alta., and provides specialized oilfield equipment and services through its subsidiaries.

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