RigNet to refinance $30 million of revolver draws into term out loan

By Wendy Van Sickle

Columbus, Ohio, Feb. 20 – RigNet, Inc. will refinance $30 million of outstanding draws under its existing $85 million revolving credit facility with a new $30 million term out loan facility, according to an 8-K filed with the Securities and Exchange Commission.

The term out loan facility will bear the same interest as the revolver and the company’s existing $15 million term loan, which is Libor plus a margin ranging from 175 basis points to 300 bps, based on the consolidated leverage ratio.

Quarterly principal installments of $1.5 million will be due beginning June 30, with the balance due on April 6, 2021.

A $45 million reserve will be established against available amounts under the revolver, which will be released and available for borrowing if the proceeds are to be used to pay obligations awarded under the arbitration proceedings involving RigNet’s dispute with Inmarsat Global Ltd., which are pending at the International Centre for Dispute Resolution.

Additionally, RigNet’s required consolidated leverage ratio will be amended to provide that the company must continue to maintain a consolidated leverage ratio of less than or equal to 2.75x.

Upon the company’s notice to the administrative agent that it has made an irrevocable payment in full of all monetary obligations under the Inmarsat dispute and verification that the payment was made, the maximum consolidated leverage ratio will automatically will increase to 3.25x for four fiscal quarters and will then decrease to 3x for the next three fiscal quarters, then to 2.75x for the fiscal quarters onwards.

As of Feb. 13, after giving effect to the amendment, the outstanding principal amount of the term loan was $10 million, the outstanding principal amount of the term out loan was $30 million, and the outstanding draws on the revolver were $37.15 million.

Bank of America, NA is the administrative agent.

RigNet is a Houston-based network infrastructure provider serving the remote communications needs of the oil and gas industry.

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