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Servus Provides $12MM in Total Credit Facilities to Dalmac Energy

December 07, 2017, 08:00 AM
Filed Under: Energy

Dalmac Energy Inc. announced that it has entered into an agreement with Servus Credit Union Ltd. whereby Servus has agreed to provide the company with a $5,000,000 revolving overdraft credit facility to assist with daily operating expenses and a $7,000,000 equipment evergreen credit facility to assist with equipment refinancing and acquisitions. Both the overdraft and equipment credit facilities will bear an annual rate of interest equal to the Servus prime lending rate plus 1.00%, floating, calculated daily and payable monthly in arrears.

Pursuant to the terms of the Credit Agreement, Dalmac will be required to maintain certain financial covenants, which will be measured annually based on the Company's year-end results.

Borrowings under the Credit Agreement have been guaranteed by Dalmac Oilfield Services Inc., the primary operating subsidiary of the Company, and secured against the assets of the Company and certain assets of Professional Consulting Solutions Ltd., the private management company of Mr. John Babic, Dalmac's President and Chief Executive Officer. In connection with the closing of this transaction, approximately $8,157,000 of the aggregate funds made available to the Company have been used to repay existing indebtedness, including that incurred under Dalmac's loan agreements with PNC Bank, Canada Branch, which, as a result of the Credit Agreement, have now been terminated. In addition, pursuant to the terms of the Credit Agreement, the interest accrued by the Company under its recently announced demand loan from Mr. Babic may only be paid at the end of each fiscal year, following confirmation from the Company that all of its financial covenants under the Credit Agreement have been met.

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