PGS' lenders agree to modify terms of LTRCompany News // May 26, 2016
Petroleum Geo-Services has received consent from the required lenders for its revolving credit facility to amend the leverage ratio maintenance covenant. The maintenance covenant, Total Leverage Ratio (TLR), is changed from maximum 4.00:1 to 5.50:1 for the period up to and including the first quarter of 2017, thereafter tightening the maximum TLR by 0.50:1 in each of the subsequent two quarters, then down to the previous TLR of 3.25:1 in the fourth quarter of 2017. From the fourth quarter of 2017 the TLR will be tightened by 0.25:1 each quarter down to 2:75:1 by the second quarter of 2018. The TLR is, as before, calculated by dividing the total indebtedness by the adjusted EBITDA for the last four quarters and reported on a quarterly basis.
Should the company, at its discretion, elect to raise equity in the future, the amendment allows for the adjusted EBITDA in the TLR calculation to include cash proceeds received from one equity issue of the company. Such proceeds would be included in the TLR calculation for four quarters.
The adjusted EBITDA can also, be adjusted to exclude one-time, non-recurring restructuring cost, if any, up to US$30 million.
The margin structure and dividend restriction are the same as earlier. A consent fee is payable to consenting banks.