Lamprell has finalized an agreement and received binding commitment letters and for the arrangement of a new secured banking facility.
The agreement is subject to certain conditions precedent, which Lamprell anticipates being satisfied in the next few weeks, at which time the new facilities will replace the Group’s existing funded facilities.
Commenting on these new facilities, Chairman John Kennedy, “Lamprell is delighted with this facility for which our new executive team, led by Jim Moffat, successfully negotiated. We are particularly appreciative of the support and confidence of our banking consortium and will continue to progress and develop our business to realise the growth and profitability objectives capable of the Company.”
The new $181 million facility arrangement is comprised of a $100 million term loan (‘Facility A’), a $60 million term loan (‘Facility B’) and a $21 million revolving credit facility (‘RCF’).
All are scheduled to mature in June 2016 although Facility A amortises over the loan period and Facility B is subject to a one-year optional extension.
The new facility will replace the Group’s existing funded facilities and will sit alongside the continuing bilateral unfunded facilities, which are used for the issue of bonds and guarantees.
The blended average interest margin for Facility A, Facility B and the RCF is estimated to be 6.7 per cent. Facility B interest costs increase incrementally from July 2014, however, upon repayment of Facility B, the margins in Facility A and the RCF will reduce.
The new facility will contain a more suitable covenant package for the business, including gross debt to EBITDA, interest cover, net worth of the Group and annual capital expenditure covenants.
The financial terms for the new facility arrangement have been factored into the Group’s forecasts for 2013 and therefore the Board maintains its expectations for the full year.
