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Key Energy amends loan, gaining more time to file 10-K for 2006
By Angela McDaniels
Seattle, Nov. 22 - Key Energy Services, Inc. amended its $547.25 million senior credit facility following the recent completion of its restatement process for 2003 results, according to a company news release.
The facility was amended to:
• Give the company until July 31, 2007 to file its 10-K annual report for 2006 and waive any defaults due to failure to file its reports for prior periods with the Securities and Exchange Commission;
• Reduce the Eurodollar interest rate spread to 250 basis points from 375 bps and commitment fees to 37.5 bps from 50 bps;
• Increase the limitation on capital expenditures through 2009 to $225 million;
• Increase the stock repurchase basket to $250 million from $50 million and permit repurchases before the company has made all required SEC filings;
• Increase the permitted acquisitions basket to $100 million from $50 million; and
• Eliminate the provision requiring the company to prepay the term loan with excess cash flow.
In addition, the lenders under the facility agreed to waive the requirement that the company issue select financial data monthly. Key Energy said it will, however, continue to release its monthly rig and trucking hours, provide select quarterly financial data and host quarterly investor conference calls.
"The amendments will result in a reduction in the annual interest expense on our senior credit facility of nearly $6 million annually and will provide the company with increased flexibility to grow," chief financial officer Bill Austin said in the release.
Key Energy is a Midland, Texas, rig-based well service company.
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