Daily News: December 7, 2017

Servus Provides $12MM Facility to Dalmac Energy

Dalmac Energy entered into an agreement with Servus Credit Union for a $5 million revolving overdraft credit facility to assist with daily operating expenses and a $7 million equipment evergreen credit facility to assist with equipment refinancing and acquisitions.

Both the overdraft and equipment credit facilities will bear an annual rate of interest equal to the Servus prime lending rate plus 1.00%, floating, calculated daily and payable monthly in arrears. Dalmac will be required to maintain certain financial covenants, which will be measured annually based on the company’s year-end results.

Borrowings under the credit agreement have been guaranteed by Dalmac Oilfield Services, the company’s primary operating subsidiary and secured against the assets of the company and certain assets of Professional Consulting Solutions, the private management company of John Babic, Dalmac’s president and CEO.

In connection with the closing of this transaction, approximately $8.157 million of the aggregate funds made available have been used to repay existing indebtedness, including that incurred under Dalmac’s loan agreements with PNC Bank, Canada Branch, which, as a result of the credit agreement, have now been terminated. In addition, pursuant to the terms of the credit agreement, the interest accrued by the company under its recently announced demand loan from Babic may only be paid at the end of each fiscal year, following confirmation that all of the company’s financial covenants under the credit agreement have been met.