Flotek Industries, Inc. announced that it has entered into an amendment to its current credit facility with PNC Bank that, among other terms, expands the size and extends the term of the facility, providing capital to refinance its outstanding convertible notes and reduce the cost of its current borrowings.

In total, the revised facility will provide Flotek with $75 million in borrowing capacity. The terms of the amended credit facility provide Flotek with access to a $50 million revolving credit facility, an increase from the current revolving credit facility of $35 million. In addition, PNC has extended Flotek a $25 million term loan which, combined with current cash on hand, will be used to refinance the Company’s existing convertible notes between now and mid-February at which time Flotek plans to redeem the remaining outstanding convertible notes. Both the revolver and term loan mature on December 26, 2017. Interest on the new facility will vary – based on the level of borrowings – between PNC’s base lending rate plus 0.50-1.50% or the London Interbank Overnight Rate (LIBOR) plus 1.50-2.50%, a substantial reduction from the 5.25% interest rate paid on the outstanding convertible notes.

“As we conclude 2012, Flotek could not be more pleased to complete this important step in our financial evolution and quest for greater financial strength and flexibility,” said John Chisholm, Flotek’s chairman, president and CEO. “We are delighted to have PNC Bank as our partner now and into the future. This new credit arrangement not only allows us to put to rest any concerns regarding refinancing of our convertible notes but, more importantly, provides access to very affordable capital to accelerate Flotek’s future growth in our core oilfield technology businesses. Combined with Flotek’s industry-leading cash generation profile, the expanded revolving line of credit provides abundant capital to meet our internal growth needs in the months and years ahead.”

Flotek is a global developer and distributor of innovative specialty chemicals and down-hole drilling and production equipment.

Previously on abfjournal.com:

PNC Extends, Amends Flotek Industries Credit Facility, Tuesday, December 18, 2012