CALGARY, March 28, 2018 /CNW/ - Zedcor Energy Inc. (the
"Company" or "Zedcor") (TSX VENTURE: ZDC) is pleased to announce
that it has signed a $13.5 million
credit facility with ATB Financial. The facility is comprised of a
$3 million operating loan facility,
which replaces the previous $1
million operating loan facility, a $2.5 million term loan facility, which will be
used to pay out the guarantee from the Loan and Security Agreement
with Maynbridge Capital, and a new $8.0
million equipment finance facility.
The operating loan is a revolving facility that bears interest
at a rate of prime plus 3.3% and is secured by the Company's
accounts receivable. The term facility will mature in two years,
bears interest at a rate of prime plus 3.3% and is secured by a
shareholder guarantee. Monthly interest payments are required
over the term of the loan with a bullet payment at maturity. The
shareholder guarantee bears interest at a rate of 5.0% per annum
and is paid monthly through the issuance of shares.
The $8.0 million equipment finance
loan will be used to finance 75% of the purchase of new rental
assets for which there is strong demand. This facility can be
drawn in tranches, is amortized over 36 months, bears interest at a
rate of 6.1% and is repayable in equal monthly installments of
principal and interest over the term.
The $13.5 million credit facility
has industry standard positive and negative lending covenants and
has financial covenants that requires the Company's current ratio
does not fall below 1.50:1.00, the debt service coverage ratio does
not fall below 1.25:1.00 and the share value of the shares pledged
under the shareholder guarantee not be less than 1.25 times the
value of the outstanding term facility.
On March 28, 2018, the Company
also renewed the Loan and Security Agreement with Maynbridge
Capital in the amount of $17.5
million for an additional six months with an option to renew
for an additional six months at the satisfaction of the
lender. The renewed Loan and Security Agreement bears interest
at 12.75% and will be serviced by six months of interest only
payments, followed by six months of principal and interest payments
in the event that the loan is renewed. The facility no longer
has any shareholder guarantees pledged as security, and all
covenants and collateral remain unchanged. The Company now has the
option to repay $7 million of the
facility at any time without penalty. The Company also amended
its Warrant Agreement with Maynbridge to increase the exercise
price to $0.27 per share from
$0.25 per share and to extend the
expiry date of the warrants by one year to July 21, 2020.
Ian McKinnon, President &
CEO, stated "This new refinancing is the next step in our strategy
to strengthen our balance sheet and reduce our cost of capital,
while also financing new growth opportunities which we expect to
deliver positive cash flow".
Forward-Looking Statements and Information
Certain statements included or incorporated by reference in this
press release constitute forward-looking statements or
forward-looking information. Forward-looking statements or
information may contain statements with the words "anticipate",
"believe", "expect", "plan", "intend", "estimate", "propose",
"budget", "should", "project", "or similar words suggesting future
outcomes or expectations. In particular, forward-looking statements
and information contained in this press release, include, but are
not limited to, expected benefits of the appointment of new
directors of the Company. Although the Company believes that the
expectations implied in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
these forward-looking statements because the Company can give no
assurance that such statements will prove to be correct.
Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of
assumptions about the future and uncertainties. Although management
believes these assumptions are reasonable, there can be no
assurance that they will be proved to be correct, and actual
results will differ materially from those anticipated. For this
purpose, any statements herein that are not statements of
historical fact may be deemed to be forward-looking statements. The
forward-looking statements or information contained in this press
release are made as of the date hereof and the Company assumes no
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new contrary
information, future events or any other reason, unless it is
required by any applicable securities laws. The forward-looking
statements or information contained in this press release are
expressly qualified by this cautionary statement.
About Zedcor Energy Inc.
Zedcor Energy Inc. is a Canadian public corporation and parent
company to Zedcor Energy Services Corp. ("Zedcor Corp."). Zedcor
Corp. is engaged in the rental of surface equipment and
accommodations to the Western Canadian Oil and Gas Industry. The
Company trades on the TSX Venture Exchange under the symbol
"ZDC".
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Zedcor Energy Inc.