Archrock gets more time to file 10-Q; potential default events waived

By Wendy Van Sickle

Columbus, Ohio, May 11 – Archrock, Inc. entered an agreement on Tuesday that waives and modifies some provisions under its July 10, 2015 credit facility with Wells Fargo Bank, NA as administrative agent, including providing more time for the company to deliver the financial statement for its most recently ended quarter, according to an 8-K filing with the Securities and Exchange Commission.

Archrock is determining what impact possible accounting errors related to Exterran Corp. subsidiary Belleli’s projects in the Middle East prior to Exterran’s spinoff from Archrock may have on Archrock’s historical financial statements.

Because the investigation into that matter is ongoing, Archrock said it is unable to file its 10-Q for the quarter ended March 31 on time. Tuesday’s amendment extends that deadline to July 31.

The amendment also waives any potential event of default arising under the credit agreement as a result of the potential inaccuracy of certain representations and warranties regarding Archrock’s prior period financial information and previously delivered compliance certificate for the 2015 fiscal year.

Also waived is any requirement that the company or Archrock Services make any representations and warranties as to the company’s prior period financial statements and other prior period financial information.

The waivers terminate on July 31 unless the company delivers replacement financial information for its 2015 audited financial statements and a certificate demonstrating Archrock’s compliance for the 2015 fiscal year prior to that date.

The amendment also modifies the credit agreement to, among other things:

• Add a condition to the borrowing of loans that, after giving effect to the application of the proceeds of each borrowing, the company’s consolidated cash balance will not exceed $35 million; and

• Require that if the company’s consolidated cash balance exceeds $35 million at the end of any business day, then the company prepay any outstanding revolving loans in an amount equal to the lesser of the excess amount or the amount of the revolving loans outstanding.

As of March 31, the company had about $171.5 million in borrowings and about $10 million in letters of credit outstanding under its revolver. Taking into account guarantees through letters of credit, the company had undrawn capacity of about $168.5 million.

Houston-based Archrock is a provider of natural gas contract compression services and a supplier of aftermarket services to customers that own compression equipment in the United States.

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