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Nuverra Extends Maturity of First and Second Lien Credit Facilities
July 27, 2020
Nuverra Environmental Solutions, Inc. (NYSE American: NES) (“Nuverra,” the “Company,” “we,” “us” or “our”) has entered into agreements with its lenders to extend the maturity date on its secured credit facilities and to modify the financial covenants to better reflect the Company’s current and projected financial profile. These amendments became effective on July 13, 2020 and consisted of a Third Amendment to its First Lien Credit Agreement with funds controlled by Ares Capital Management (“Ares”) and a Second Amendment to its Second Lien Credit Agreement with funds controlled by Ascribe Capital Management (“Ascribe”) and Gates Capital Management (“Gates Capital”). The amendments extended the scheduled maturity of the First Lien Facility from February 7, 2021 to May 15, 2022 and the Second Lien Facility from October 7, 2021 to November 15, 2022.
PRIMARY TERMS OF THE FIRST LIEN AMENDMENT
Extend the maturity date from February 7, 2021 to May 15, 2022
Defer measurement of the fixed charge coverage ratio ("FCCR") covenant until the second quarter of 2021 and set the minimum FCCR at 0.70 to 1.00 for such quarter and at 1.00 to 1.00 thereafter
Add a monthly minimum liquidity covenant that requires the Company to maintain minimum liquidity amounts as follows: $8,000,000 through July 31, 2020, $5,500,000 through August 30, 2020, $5,000,000 through November 30, 2020 and $4,000,000 on and after December 1, 2020
Prohibit draws on the revolving facility until the FCCR is 1.00 to 1.00
Set the maximum capital expenditures covenant for 2020 and 2021 at $6,000,000 and $7,500,000, respectively.
As part of the amendment, Nuverra repaid $2,500,000 of principal on the First Lien Facility.
PRIMARY TERMS OF THE SECOND LIEN AMENDMENT
Extend the maturity date from October 7, 2021 to November 15, 2022
Defer measurement of the FCCR covenant until the second quarter of 2021 and set the minimum FCCR at 0.60 to 1.00 for such quarter and at 0.85 to 1.00 thereafter
Add a monthly minimum liquidity covenant that requires the Company to maintain minimum liquidity amounts as follows: $6,800,000 through July 31, 2020, $4,675,000 through August 30, 2020, $4,250,000 through November 30, 2020 and $3,400,000 on and after December 1, 2020
Set the maximum capital expenditures covenant for 2020 and 2021 at $7,058,823 and $8,823,529, respectively.
While the Company is preparing to issue the quarterly financial statements for the period ending June 30, 2020 in August, we are providing a preliminary liquidity update in conjunction with the amendments to the First Lien and Second Lien Facilities. As of June 30, 2020, the outstanding balance of the First Lien Facility was $16.4 million. As part of the amendment, we made a payment of $2.5 million on July 13, 2020, reducing the outstanding balance on the First Lien Facility to $13.9 million. As of June 30, 2020, our cash balance was $15.8 million. We had no outstanding draws under the revolving credit facility and the balance of the Second Lien Facility was $8.8 million as of June 30, 2020.
“In the current market where capital in the energy space is extremely scarce, we are very pleased to have the support of Ares, Ascribe and Gates Capital in extending the maturity of our facilities to allow us to focus on operating the business and continuing to navigate these challenging conditions. We now have almost two years without any debt maturities and have adjusted the financial covenants to better reflect the market conditions and the Company’s recent performance. While we are still required to maintain significant liquidity, we continue to focus on that issue daily. As of today, we see some signs of modestly improving industry health, but we are still facing challenging headwinds and don’t see meaningful relief in the near future,” said Charlie Thompson, Chief Executive Officer.
About NuverraNuverra Environmental Solutions, Inc. provides water logistics and oilfield services to customers focused on the development and ongoing production of oil and natural gas from shale formations in the United States. Our services include the delivery, collection, and disposal of solid and liquid materials that are used in and generated by the drilling, completion, and ongoing production of shale oil and natural gas. We provide a suite of solutions to customers who demand safety, environmental compliance and accountability from their service providers. Find additional information about Nuverra in documents filed with the U.S. Securities and Exchange Commission (“SEC”) at http
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