HOUSTON--(BUSINESS WIRE)--Forum Energy Technologies, Inc. (NYSE: FET) today announced it has entered into an amended credit facility (the “Credit Facility”) with its bank syndicate. The $200 million Credit Facility reduces Forum’s on-going annual commitment fees on the undrawn facility by $2.25 million and lowers the earnings based covenants to provide for greater borrowing availability during the prolonged industry downturn.
Key elements of the Credit Facility include:
- Total lender commitments reduced to $200 million from $600 million with an ability to increase the Credit Facility by an additional $150 million, subject to certain restrictions.
- Maximum total leverage ratio and minimum interest coverage ratio eliminated.
- Maximum senior secured leverage ratio as of each quarter end increased to 4.50 times from 3.50 times through December 31, 2016, 4.0 times through 2017, and 3.5 times through the maturity of the facility.
- Added a new minimum fixed charge coverage ratio of 1.25 times that is only tested if availability falls below certain levels.
Availability under the Credit Facility is subject to a borrowing base comprised of eligible accounts receivable, inventory and cash. The Credit Facility maturity date of November 2018 was not changed. As of December 31, 2015, Forum had no borrowings outstanding under the Credit Facility and $12.7 million of outstanding letters of credit.
James Harris, Forum’s Chief Financial Officer, stated, “We are pleased with the continued support of our bank group. As we expect to continue to generate free cash flow through the downturn, this facility will provide critical additional capital for potential strategic acquisition opportunities.”
Cris Gaut, Forum’s Chairman and Chief Executive Officer, commented, “This amendment reduces our cost by eliminating borrowing capacity we were unlikely to use, and provides sufficient availability for potential acquisitions and anticipated capital needs. We believe the amended facility will provide our shareholders further confidence that Forum is among the select group of companies that has staying power throughout this downturn.”
Additional information regarding the Credit Facility can be accessed in a Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on February 26, 2016.
Forum Energy Technologies is a global oilfield products company, serving the subsea, drilling, completion, production and infrastructure sectors of the oil and natural gas industry. The Company’s products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com.
Forward Looking Statements and Other Legal Disclosure
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the company, including any statement about the company's future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, new product development activities, costs and other guidance included in this press release.
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