Cal Dive refinances debtCompany News // May 12, 2014
Cal Dive International has refinanced its debt to provide more flexibility and liquidity for ongoing and future construction work, primarily in Mexico.
The company has entered into a US$100 million senior secured second lien term loan facility, that includes a new loan of US$80 million and the conversion of the company’s existing US$20 million unsecured term loan to a secured term loan under the second lien facility.
Both term loans under the second lien facility mature in 2019 with no scheduled amortization. The US$20 million term loan bears interest at Libor plus 6.75 per cent and the US$80 million term loan bears interest at Libor plus 11.75 per cent.
The net proceeds of the loan will be used to repay the company’s outstanding US$29.7 million secured term loan under its credit facility and US$45.0 million of outstanding borrowings under its revolving credit facility.
As part of the refinancing, the company is permitted to obtain up to US$75 million in local project financing for international projects, and intends to transition from relying on its revolving credit facility for the working capital requirements for its large construction projects to utilizing local project financing for this purpose.
The revolving credit facility capacity, already scheduled to decrease to US$110 million by the end of July 2014, will be further reduced by US$5 million per month thereafter until it reaches US$85 million by the end of 2014.
With the refinancing, the company’s total debt on a pro forma basis as of March 31, 2014 will consist of US$86.25 million in convertible notes, a US$100 million senior secured second lien facility and US$60.3 million outstanding under a senior secured revolving credit facility.
Quinn Hébert, Cal Dive’s Chairman, President and Chief Executive Officer, said: "We are pleased to have successfully completed the refinancing of our balance sheet. The new debt structure will provide us more flexibility and liquidity, which will enable us to take on more large international construction projects. These projects often require significant amounts of working capital and we want to be able to take full advantage of the opportunities in the market.”