Precision Drilling plans to reduce debt following merger with Grey Wolf; transaction set to close Dec. 23

By Lisa Kerner

Charlotte, N.C., Dec. 11 - Precision Drilling Trust said that due to the higher-than-expected costs and fees for its credit facilities, the company will pursue a debt-reduction program following completion of its merger with Grey Wolf, Inc.

The credit facilities will consist of $800 million of senior secured term loan facilities, a $400 million senior unsecured facility and a $400 million senior secured revolving credit facility, according to a Precision Drilling news release.

In addition, Precision Drilling said it may reduce or suspend monthly cash distributions and will re-evaluate its capital-expenditure program.

Precision Drilling and Grey Wolf will file a supplement to their proxy statement/prospectus with the Securities and Exchange Commission to reflect the pro forma effect of the credit facilities on the combined company, the release said.

Grey Wolf will hold its special meeting of shareholders on Dec. 23 as planned.

The merger is expected to close immediately after the meeting, the release said.

In August, Precision Drilling, a Calgary, Alta., oil and gas drilling and exploration company, agreed to acquire Grey Wolf in a deal that will give Grey Wolf shareholders $5 per share in cash plus 0.1883 newly issued Precision Drilling trust units.

Precision Drilling will pay a maximum of approximately $1.12 billion in cash and approximately 42 million Precision Drilling trust units, it was previously reported.

Houston-based Grey Wolf is the fourth-largest provider of contract land-drilling services in the United States.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.