REG - Hunting PLC - $150m Asset Based Lending Facility

HuntingAnnouncement

07/02/2022 14:00

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RNS Number : 9240A  Hunting PLC  07 February 2022

 For Immediate Release  7 February 2022

 

 

Hunting PLC

 

("Hunting" or "the Company" or "the Group")

 

$150m Asset Based Lending Facility

 

Hunting PLC (LSE : HTG), the international energy services group, today
announces that on 7 February 2022 the Company concluded a refinancing of its
core borrowing facilities and has entered into a new $150m Asset Based Lending
facility (the "ABL" or the "Refinancing"). The lending group for the ABL
comprises Wells Fargo and HSBC.

 

The ABL facility has a four-year term, maturing on 7 February 2026 and
replaces the Company's $160m Revolving Credit Facility which has been
cancelled.

 

The ABL facility contains an accordion feature of up to a further $50m which
is accessible subject to further credit approval from the relevant lenders,
enabling the Company to increase the total facility quantum to $200m.

 

The Refinancing delivers a more flexible funding arrangement, leveraging the
strength of the Company's balance sheet to unlock bank funding by linking the
Company's borrowing capacity to secured asset values rather than earnings. The
ABL construct provides a degree of insulation against the historical
cyclicality of the oil and gas sector and the sensitivity of a conventional
RCF earnings-based covenant regime.

 

The three main asset classes that will form the "Borrowing Base" of the ABL
facility against which bank funding can be advanced are eligible North
American trade receivables, inventory and freehold properties. The Borrowing
Base may be recalibrated periodically based on the then-prevailing in scope
asset values as would be typical for facilities of this nature. The ABL
facility will be secured by way of first priority charges over the Borrowing
Base assets as well as an all assets debenture from the Company and each of
its material subsidiaries.

 

The ABL facility includes a "Fixed Charge Cover Ratio" ("FCCR") financial
covenant that is only assessed when utilisation of the facility exceeds 87.5%
of the available facility. The FCCR measure looks back over the trailing
twelve-month period to assess whether EBITDA (as defined by the facility
agreement) covers the Company's Fixed Charges at a ratio of at least 1:1.

 

The ABL structure will provide the Group with access to consistently higher
levels of committed liquidity than would have been available under the now
cancelled RCF, due to the significantly reduced sensitivity to the prevailing
earnings environment. It is management's view, therefore, that the primary
refinancing objective has been accomplished and this new ABL facility provides
a strong foundation to support the strategic growth aspirations of the
Company.

 

EY acted as independent financial advisor to the Company in respect of the
Refinancing.

 

Commenting on the new ABL, Jim Johnson, Chief Executive of Hunting said:

 

"The new ABL provides Hunting with a significant increase to liquidity and
gives the Group 'through the cycle funding' which will be vital as we enter a
new phase of growth in our core markets.

 

"Hunting has adopted strong capital discipline for many years, which has
benefited the Group since the onset of COVID-19 and with the new borrowing
facility, we can capture new growth opportunities."

 

 For further information please contact:

 Hunting PLC                              Tel: +44 (0) 20 7321 0123

 Jim Johnson, Chief Executive

 Bruce Ferguson, Finance Director

 Tarryn Riley, Investor Relations

 Buchanan                                 Tel: +44 (0) 20 7466 5000

 Ben Romney

 Jon Krinks

 

 

 

Notes to Editors:

 

About Hunting PLC

 

Hunting PLC is an international energy services provider to the world's
leading upstream oil and gas companies. Established in 1874, it is a premium
listed public company traded on the London Stock Exchange. The Company
maintains a corporate office in Houston and is headquartered in London. As
well as the United Kingdom, the Company has operations in Canada, China,
Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab
Emirates and the United States of America.

 

The Group reports in US dollars across four segments: Hunting Titan, North
America, Europe, Middle East and Africa ("EMEA") and Asia Pacific.

 

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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