ADES obtains new $450 million five-year syndicated credit facility

By Sarah Lizee

Olympia, Wash., March 23 – ADES International Holding Ltd. signed a $450 million five-year syndicated credit facility, according to a company announcement.

Interest will be Libor plus 500 basis points, in line with the company’s existing facilities.

The facility has three separate tranches.

The $200 million tranche A will be used to refinance ADES’ existing loans, enabling the company to simplify and consolidate its borrowings into one facility, as well as extend their maturity. Tranche A has a repayment grace period of 18 months, following which 75.25% of the principal amount will then be amortized on a straight-line basis semiannually, with the remaining 24.75% repayable on maturity.

The $41.5 million tranche B be used to refinance the company’s existing overdraft facilities, under which about $21 million was drawn as of Dec. 31. The remaining funds will be allocated to additional working capital to support further contract wins. There is a bullet repayment on the maturity date of the facility.

The $208.5 million tranche C will be used to partially finance new acquisitions with respect to ADES’ acquisition program in addition to any rig refurbishment work associated with newly acquired assets. Tranche C includes a $35 million Islamic Murabaha tranche which has a repayment grace period of 18 months, following which 67.72% of the principal amount drawn will then be amortized on a straight-line basis semiannually, with the remaining 32.28% repayable on maturity.

The remaining balance of tranche C, excluding the Islamic Murabaha tranche, has a repayment grace period of 18 months, following which 75.25% of the principal amount drawn will then be amortized on a straight-line basis semiannually, with the remaining 24.75% repayable on maturity.

The facility was jointly arranged by the Bank of America Merrill Lynch and the European Bank for Reconstruction and Development, and was signed with participation from 11 multilateral, regional and local banks.

“As previously communicated in our recent 2017 results announcement, this facility, together with the proceeds of ADES’ May 2017 initial public offering on the London Stock Exchange, will allow us to consolidate our borrowings and enhance ADES’ purchasing power,” Mohamed Farouk, chief executive officer, said in the announcement.

“At a time when ADES is participating in a number of tenders and screening accretive acquisitions across our core MENA markets, this facility provides further financial flexibility and expands the range of opportunities that we are able to consider and act upon swiftly.”

ADES International Holding is an oil and gas drilling and production services provider with headquarters in Dubai.

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