U.S. Well principal, interest under term loan suspended for 24 months

By Wendy Van Sickle

Columbus, Ohio, April 1 – U.S. Well Services Inc. entered into an amended and restated senior secured term loan credit agreement with CLMG Corp. that provides for a suspension of scheduled principal and interest payments for 24 months, according to a news release.

Under the terms of the amended term loan facility, U.S. Well Services’ next scheduled principal and interest payment will be due June 30, 2022, on which date interest rate will resume accruing at Libor plus 825 basis points with a 2% Libor floor and amortization payments of 0.5% of the original principal amount of the loan will resume.

Also, the maturity date of the loan will be extended by 18 months to Dec. 5, 2025.

In exchange for amending the term loan facility, the lenders received an extension fee of a $20 million cash payment, $1.05 million of newly issued 12% convertible preferred stock and approximately 5.5 million shares of U.S. Well Services’ class A common stock.

The cash portion of the fee is being funded by the issuance of additional new convertible preferreds to institutional investors in a private placement.

“This series of transactions significantly strengthens U.S. Well Services’ liquidity profile and balance sheet in a challenging market environment,” said Kyle O’Neill, chief financial officer, in the release. “We believe that this enhancement to the company’s capital structure, in combination with our recent cost reduction measures, positions U.S. Well Services to continue delivering on behalf of its customers and create value for shareholders.”

U.S. Well Services is a Houston-based hydraulic fracturing services company.

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