East West Bank provided a refinancing plan to Enservco, amending the company’s senior revolving credit facility and reducing its bank debt.

Enservco’s total bank debt was reduced by $16 million. The transaction resulted in a $17.5 million increase in stockholders’ equity when included with its chairman’s recent investment fund conversion of $1.5 million of subordinated debt and accrued interest into Enservco restricted common stock

“We are extremely pleased to have finalized this transformational agreement with EWB that not only creates a more viable financial structure, but also adds EWB as a major equity holder,” Rich Murphy, executive chairman of Enservco, said. “With this lengthy process now behind us, we are excited to refocus our full attention on building our business. We are gearing up to meet an expected seasonal increase in demand during our fourth quarter of 2020 and first quarter of 2021, when Enservco generates the majority of its revenue and profitability.”

Murphy’s investment firm, Cross River Partners, is Enservco’s largest shareholder.

The new financing includes a $17 million term loan and a $1 million working capital revolving line of credit with no initial balance, both of which have Oct. 15, 2021 maturity dates. The term loan is interest only with potential for principal payments in the event Enservco reaches certain profit metrics. In return for the $16 million in debt reduction, Enservco issued to East West Bank 8 million shares of restricted common stock that will not be tradeable for six months and 15 million common stock purchase warrants exercisable at $0.25 per share beginning Oct. 15, 2021, through Oct. 15, 2026.

As previously reported, Enservco signed a non-binding letter of intent with East West Bank to amend its existing senior revolving credit facility to reduce bank debt by $16 million, amend the current facility into a term loan and provide a new working capital revolving line of credit in exchange for equity earlier this month.

Enservco provides a range of oilfield services, including hot oiling, acidizing, frac water heating and related services.