Ceiba Energy Services entered into an agreement with Alberta Treasury Branches to amend the terms of its credit facility dated March 7, 2016.
The credit facility provided for up to $15 million of credit which included a $5 million revolving credit facility and a $10 million term credit facility, $5 million of which was immediately available and $5 million of which is available when Ceiba achieves adjusted EBITDA in the last 12 months of $4 million.
The credit facility has one financial covenant that requires the company’s debt service coverage ratio to be greater than 1.3. The debt service coverage ratio calculation is defined in the credit facility and is generally the company’s adjusted EBITDA in the last 12-month period divided by the total of the company’s interest paid and principal payments (excluding repayment of convertible debentures) in the last 12-month period.
The amendment extended the maturity date of the $5 million drawn term facility from May 31, 2017 to September 30, 2017 (unless further extended by Ceiba and ATB), removed the second $5 million term facility and removed the financial covenant for the 12-month period ended June 30, 2017. The $5 million revolving credit facility remains in place and interest rates for the credit facility remain unchanged.
Calgary, Alberta-based Ceiba provides specialized services to the energy sector, specifically to companies involved in the exploration, extraction and production of oil and natural gas in Western Canada.