CALGARY, Feb. 20, 2013 /CNW/ - Petrowest Corporation (PRW : TMX) announced today that it has entered into a new three-year, Canadian $50 million syndicated credit facility with GE Capital Canada (the "New Facility"). The New Facility is comprised of two sub-facilities: a $45 million term facility which has been fully drawn and a $5 million capital expenditures facility which is available for one year.
The interest rate for the New Facility is, at the election of Petrowest, the discount rate for bankers acceptances plus 4.5% or the prime rate plus 3.5%. The New Facility is secured by a general security agreement over all present and after-acquired property of each limited partnership in the Petrowest group (Petrowest Civil Services LP, Petrowest Construction LP, Petrowest Environmental Services LP, Petrowest Services Rentals LP and Petrowest Transportation LP), and by unlimited guarantees from each of Petrowest Corporation and Petrowest GP Ltd. The amortization period for the New Facility is six years.
Lloyd Wiggins, Petrowest's Chief Financial Officer, stated "we are pleased to have entered into a new credit facility with interest rates significantly lower than our existing credit facility. The lower carrying costs will benefit Petrowest from both a cash flow and bottom line perspective going forward."
The existing US dollar credit facility (US $30.7 million due in 2016) is being paid out with the proceeds from the New Facility, as will the remaining balances of the secured convertible debentures ($1.8 million in aggregate) originally issued on December 31, 2010.
The existing Canadian dollar term loan due in 2015, in the principal amount of $22 million and secured by a first charge on accounts receivable, remains in place. Petrowest is in discussions with lenders for a revolving operating line of credit which, if successfully completed, will be used to pay out the existing Canadian dollar term loan.
Petrowest is an Alberta corporation involved in pre-drilling and post-completion energy services as well as industrial and civil infrastructure projects, gravel crushing and hauling for non-energy sector customers. Petrowest's primary operations are based in the Grande Prairie area of northern Alberta and in northeastern British Columbia.
Forward Looking Information
This news release contains forward looking statements related to Petrowest negotiating a revolving operating line of credit. These statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward looking statements, including, without limitation, the inherent uncertainty of operations and cost estimates and the potential for unexpected costs and expenses; uncertain political and economic environments; changes in laws or policies; and other risks and uncertainties, including those described under risk factors in Petrowest's current Annual Information Form and management discussion and analysis. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward looking statements. There can be no assurance that Petrowest will be successful in securing a revolving operating line of credit. The forward looking information contained herein is presently for the purpose of assisting investors in understanding Petrowest's plans and objectives and may not be appropriate for other purposes. Accordingly, readers are advised not to place undue reliance on forward looking statements.
SOURCE: Petrowest Corporation
For further information:
please contact Richard Quigley, President and Chief Executive Officer, at (780) 830-0881, or Ian Hogg, Vice President, Corporate Affairs, at (403) 384-0407, or Lloyd Wiggins, Chief Financial Officer, at (416) 945-6607, or [email protected].