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Jefferies Finance Arranges $45MM Credit Facility for Smart Sand

December 15, 2016, 07:35 AM
Filed Under: Manufacturing

Smart Sand, Inc. has entered into a new $45 million senior secured revolving credit facility with Jefferies Finance LLC serving as the sole lead arranger, bookrunner, administrative agent and collateral agent. The revolving credit facility has a three-year term, with a scheduled maturity date of December 8, 2019. The revolving credit facility bears interest at a rate of LIBOR plus an applicable margin ranging from 3.00% to 4.00% that varies with the Company’s leverage ratio.  The revolving credit facility replaces the company’s prior revolving credit facility which was paid off and terminated on November 9, 2016, with proceeds generated from its initial public offering (“IPO”) on November 3, 2016.  The company believes that availability under this facility, together with the proceeds generated through its IPO, will provide the company with the financial flexibility necessary to support its current operations and corporate growth objectives.

Additionally, the company announced today that it has assigned its general unsecured claim in the CJ Holdings Co., et. al. Chapter 11 Reorganization to third parties for $6.6 million.

In August 2016, C & J Energy Services Inc., rejected its product purchase agreement with the company and demanded a refund of certain prepayments made under the contract prior to the bankruptcy filing.The company pursued a claim for damages in the bankruptcy proceeding and ultimately entered into a settlement agreement resulting in the company being granted a $12 million general unsecured claim in the CJ Holdings Co. Chapter 11 Reorganization.

On December 9, 2016, third parties agreed to purchase the company’s general unsecured claim for $6.6 million which amount was paid in full on December 12, 2016. 

Smart Sand, Inc. is a pure-play, low-cost producer of high-quality Northern White raw frac sand, which is a preferred proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells.

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