GE Capital Canada Provides New C$50MM Facility to Petrowest
Petrowest Corporation announced it has entered into a new three-year, Canadian $50 million syndicated credit facility with GE Capital Canada. The new facility is comprised of two sub-facilities: a $45 million, six-year, 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, Petrowest Construction, Petrowest Environmental Services, Petrowest Services Rentals and Petrowest Transportation), and by unlimited guarantees from each of Petrowest Corporation and Petrowest GP Ltd.
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 U.S. dollar credit facility (U.S. $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 said it 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.