Oilfield services provider Petrofac has extended $700 million of its banking facilities at its request with the unanimous support of lenders.
Petrofac said on Wednesday that these extensions comprised a $610 million extension of its existing revolving credit facility to 2 June 2022, with an option to extend for a further six months, and a $90 million extension of its bilateral term facility with Abu Dhabi Commercial Bank to 1 April 2022.
The extension of the revolving credit facility could be used until 2 December 2022, subject to the approval of lenders, and can be up to a maximum of $550 million. The Abu Dhabi Commercial Bank facility included a prepayment obligation on 31 March 2021.
According to Petrofac, the increase in margin on these facilities reflects market conditions and remains competitive.
“ Existing financial covenants remain unchanged and will be tested on a quarterly basis. In line with our liquidity policy, the extended revolving credit facility includes a minimum liquidity covenant of $100 million ”, the company said.
The revised facilities of $700 million represent a reduction in facility size of $450 million, in line with business requirements and reflecting Petrofac’s transition to a capital-light business model. Both facilities were due to be repaid or prepaid on or before 2 June 2021.
The extension of these facilities, together with the issue of £300 million (around $414 million) in commercial paper under the Covid Corporate Financing Facility in February 2021, preserve Petrofac’s strong liquidity position which was $1.3 billion on 31 March – before the reduction in facility size announced on Wednesday.
Petrofac also stated that it expected to report net debt of $116 million as of 31 December 2020, better than expected, and continues to target eliminating net debt as market conditions and contract awards recover.
In recent company news, Petrofac was suspended by UAE’s oil and gas giant ADNOC from competing for new contract awards until further notice.
This is due to the Serious Fraud Office’s announcement of additional pleas in January by a former employee under the Bribery Act 2010 in relation to historic contract awards in the UAE in 2013 and 2014.