Fairmount Santrol reduces U.S. revolving commitments to $99 million

By Wendy Van Sickle

Columbus, Ohio, Oct. 1 – Fairmount Santrol Inc. reduced U.S. revolving commitments to $99 million from $124 million on Wednesday under its credit agreement dated Sept. 5, 2013 with Barclays as administrative agent, according to an 8-K filed with the Securities and Exchange Commission.

The amendment also modified the agreement’s minimum consolidated EBITDA covenant, which applies only if the company has drawn more than $31.25 million under its revolving line.

Also, at any time Fairmount’s cash and cash equivalents exceeds $50 million for more than five consecutive business days, the company is now required to pay down its revolving loan balance by the amount of the excess.

Fairmount must also deposit all revolving loan proceeds into a controlled deposit account and limit its use of revolving loan proceeds to ordinary course payments to unaffiliated third parties; and limit total use of its U.S. and Canadian revolving commitments under the agreement to $40 million until the earlier of March 31, 2017, or the first date on which the company’s leverage ratio as of the last day of any fiscal quarter end is less than 4.75 to 1.

The company’s Canadian revolving commitment under the agreement will stay at C$1 million.

Based in Chesterland, Ohio, Fairmount Santrol is a provider of high-performance sand and sand-based products used by oil and gas exploration and production companies to enhance the productivity of their wells.

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