CARBO Ceramics amended its credit agreement with the Wilks Brothers and completed a promissory note with its affiliate, Equify Financial.
The total amount of borrowings under this new structure remains the same at $65 million, however, the debt is now split between the Wilks and Equify, $33 million and $32 million, respectively. The interest rate of 9%, maturity on December 31, 2022, and the terms and conditions for both loans remain the same as the previous credit agreement.
By amending the previous credit agreement, the company is able to retain the net cash proceeds from the sale of its Millen, GA facility that otherwise would have been required to pay down the credit facility principle if not reinvested within 270 days from the completion of the sale.
Additional amendments of the ancillary documents include: an extension of the interest make-whole payment through March 31, 2021, one appointment to the CARBO Board of Directors by the Wilks (and one additional appointment if certain ownership requirements are met), an increase in the Wilks equity ownership cap from 15% to 29.5%, a revision of the warrant strike price to $4 per share and extension of the warrant maturity to December 31, 2024.
Gary Kolstad, chairman and CEO of CARBO said, “Our relationship with the Wilks has remained constructive during this downturn and has provided us financial flexibility as we transform the company. We are pleased with the outcome of our negotiations with the Wilks to complete this amendment that strengthens our balance sheet and provides liquidity to pursue opportunities that should accelerate our transformation strategy.”
CARBO is a global technology company that provides products and services to several markets, including oil and gas, industrial, agricultural, and environmental markets to enhance value for its clients.
