Savanna Energy renews, extends senior secured revolving facility

By Susanna Moon

Chicago, April 17 – Savanna Energy Services Corp. said it renewed and extended its senior secured revolving credit facility comprising a C$220 million Canadian syndicated facility, a A$10 million Australian facility and a C$20 million operating facility.

As part of the renewal, Savanna retained a C$50 million accordion, according to a company press release.

The renewal, extension and financial covenant amendments provide Savanna with increased financial flexibility amid the “prevailing uncertain market conditions,” according to a company press release.

The C$250 million facility is for a committed four-year term and is now due in May 2019.

The facility maintains an earlier maturity date of Jan. 25, 2018 if Savanna’s C$175 million senior notes are not repaid or refinanced by that date, the release noted.

The facility does not require any mandatory principal payments prior to maturity and can be further extended beyond May 2019 with the consent of the lenders.

The financial covenants require the company to maintain a total funded debt to EBITDA ratio at or below 4 times.

In response to the “precipitous drop” in crude oil prices, the company’s lenders agreed to revise the total funded debt to EBITDA financial covenant to 4.5 times for the quarter ending Sept. 30, to 5.25 times for the quarters ending Dec. 31, 2015 and March 31, 2016, 5 times for the quarters ending June 30, 2016 and Sept. 30, 2016, to 4.5 times for the quarter ending Dec. 31, 2016 and to 4 times after that.

In addition, for the determination of 12-month trailing EBITDA for the purpose of calculating the company’s financial debt covenants, Savanna’s lenders agreed to allow the add back of non-recurring cash charges of up to $7.5 million for employee severance costs incurred in 2015 but not beyond the Dec. 31 reporting period.

All other terms remain unchanged.

Savanna is a Calgary, Alta.-based drilling and well-servicing provider for the oil and gas industry.

© 2015 Prospect News.
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