Hercules Offshore amends facility to allow assets purchase funding

By Jennifer Chiou

New York, March 8 - Hercules Offshore Inc. entered into an amendment to its credit agreement on March 3 covering its $475 million term loan and $175 million revolving credit facility, paving the way for the company to use borrowings to finance a portion of the purchase of 20 jackup rigs and related assets from Seahawk Drilling Inc., according to an 8-K filing with the Securities and Exchange Commission.

The company paid a 0.25% fee amounting to $1.4 million to the syndicate of lenders. It originally obtained lender consents in February.

As reported at that time, pricing on the term loan increased to Libor plus 550 basis points from Libor plus 400 bps under the amendment, while the 2% Libor floor was left unchanged.

The amendment also permanently reduced the revolver to $140 million from $175 million and increases the company's investment basket to $50 million from $25 million.

UBS is the lead bank on the deal.

As previously noted, Hercules is buying the Seahawk assets for 22.3 million shares of its common stock and cash consideration of $25 million.

Hercules Offshore is a Houston-based operator of rigs and marine support vessels.

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