Etablissements Maurel & Prom (M&P) signed an amendment agreement to re-profile the repayment of a $600 million term loan with the Bank of Tokyo-Mitsubishi UFJ, Natixis, PT Bank Mandiri, Sumitomo Mitsui Banking, Crédit Agricole, DBS, ING, HSBC and PT Bank Negara Indonesia. The company also re-profiled the repayment of a $200 million loan ($100 million drawn and $100 million undrawn) from its controlling shareholder PT Pertamina International Eksplorasi Dan Produksi.
Under the terms of the amendments, the scheduled debt repayments for both facilities have been reduced in 2020 and 2021, with the aim of allowing M&P to maintain liquidity and better adapt debt repayments to cash flow generation and investment profile.
“Securing the amendments is a healthy measure, which will allow M&P to deliver tangible progress on deleveraging while maintaining a robust cash balance in the current macroeconomic environment, Olivier de Langavant, CEO of M&P, said. “Following the initial two year grace period, M&P is committed to reducing its debt, and the first quarterly installment of the term loan to be repaid in the upcoming days marks a significant milestone. M&P is strongly positioned to face the volatility of current market conditions thanks to its long-life assets and the flexibility offered by the operational control of its key assets.”
As a condition to the amendment to the term loan, it has been agreed with the lenders that dividend distribution will be capped at an annual amount of $15 million for 2021 and 2022. M&P’s dividend distribution is currently limited to an annual amount of $10 million until year-end 2020.
M&P’s total outstanding debt currently amounts to $700 million ($600 million under the term loan and $100 million under the shareholder loan). As of the end of February 2020, M&P’s cash position stood at $267 million, resulting in a net debt of $433 million.