Total Energy Services Inc. ("Total" or the "Company") (TSX:TOT) announced today that it has agreed to terms on $225 million of revolving credit facilities (collectively, the "Credit Facility") with a syndicate of lenders led by HSBC Bank Canada. The Credit Facility is expected to become effective on June 20, 2017, at which time it will replace the Company's existing $65 million credit facility and the $150 million credit facility previously established by Savanna Energy Services Corp. ("Savanna"). The Credit Facility will have a term to maturity of three years and, subject to certain terms and conditions including the agreement of existing lenders to increase their commitments, Total may elect to increase amounts available to it under the Credit Facility, at any time during the term, by up to $75 million (to a maximum borrowing of $300 million).
Total negotiated and is establishing the Credit Facility to enable it to address various obligations of Savanna incurred prior to the Company's acquisition of outstanding Savanna common shares under the Total takeover bid that expired in April 2017. Total plans to complete a subsequent acquisition transaction involving Savanna following a special meeting of Savanna shareholders scheduled for June 20, 2017, which is expected to result in all of the outstanding common shares of Savanna (as amalgamated in connection with the subsequent acquisition transaction) being owned by Total. In addition to supporting Total's consolidated business financing requirements going forward, the Company intends to utilize the Credit Facility to fund: (i) the repayment by Savanna of $104.5 million owing to Alberta Investment Management Corp., plus accrued and unpaid interest; and (ii) the purchase by Savanna of any 7% senior unsecured notes (the "7% Notes") tendered to Savanna's change-of-control offer made to the holders of outstanding 7% Notes on April 24, 2017 (the "Purchase Offer").
Savanna has entered into an agreement with Phillips, Hager & North Investment Management ("PH&N"), which holds $60 million aggregate principal amount of 7% Notes, in which PH&N agreed that it will not tender the 7% Notes held by it to the Purchase Offer; as a result, the maximum principal amount of 7% Notes to be repurchased by Savanna under the Purchase Offer is not expected to exceed $47.1 million.
Total is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total are listed and trade on the TSX under the symbol "TOT".
SOURCE: Total Energy Services Inc
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