North American Construction Group Ltd. Announces $300M Credit Facility
November 23 2018 - 4:00PM
North American Construction Group Ltd. (“NACG” or “the Company”)
(TSX:NOA.TO/NYSE:NOA) announced today an upsized $300 million
Amended and Restated Credit Agreement (the “Credit Facility”) with
its banking syndicate led by National Bank Financial. The
upsized Credit Facility was executed concurrent with today’s
closing of the asset purchase agreement with Aecon Group Inc.
(“Aecon”).
Jason Veenstra, Chief Financial Officer stated,
“The acquisition of the heavy equipment fleet of Aecon is an
exciting milestone event for NACG and we were pleased to work with
our supportive syndicate members to finance this important
opportunity. The Credit Facility is consistent with existing
terms, maintains attractive rates and provides sufficient
flexibility to allow for the $199 million asset transaction to
close immediately.”
The Credit Facility more than doubles NACG’s
borrowing capacity to $300 million with an ability to increase the
maximum borrowings by an additional $50 million, subject to certain
customary conditions. It is also important to note that
in addition to the upgraded credit facility borrowing
capacity, the equipment financing limit has been
increased to $150 million up from $100 million allowing for
additional borrowing flexibility. The term of the Credit
Facility is committed for three years and matures on November 23,
2021, with an option to extend on an annual basis.
The Credit Facility is comprised solely of a
revolver with no scheduled repayments and is not governed by a
borrowing base that limits available borrowings. Financial
covenants are consistent with the previous agreement and are tested
quarterly on a trailing four quarter basis. The Credit
Facility covenants are in full compliance at time of closing and
have been established in consideration of the asset purchase
agreement with Aecon.
In addition to the new Credit Facility, the
Company recently entered into a 25-year $19.9 million mortgage with
Business Development Bank of Canada (“BDC”), which will be drawn
upon to cover costs already incurred in relation to the Company’s
recent acquisition of land and construction of its maintenance
facility and head office complex in Acheson, Alberta. The
mortgage, which expires in November 2043, bears interest for the
first five years at a fixed rate of 4.85% and is secured by a first
security interest in the maintenance and office complex. The
BDC mortgage and security are structured as permitted exclusions
from the security interests of the syndicate Lenders and the Senior
Debt as defined in the Credit Facility.
The Company believes that this facility increase
to $300 million and the additional equipment financing limit
provides the borrowing capacity required of a heavy equipment
operator and supports its strategic priorities while providing the
ability to expand its liquidity in line with its growth
objectives.
Forward-Looking Information
The information provided in this release
contains forward-looking statements. Forward-looking
statements include statements preceded by, followed by or that
include the words Forward looking statements include the
statements that the Company believes the Credit Facility covenants
provide the flexibility to meet both its current and ongoing needs
and that the increased facility amount and equipment financing
capacity of the Credit Facility will provide the capacity the
Company requires and will support its strategic priorities while
providing the ability to expand its liquidity in line with its
growth objectives,
The material factors or assumptions used to
develop the above forward-looking statements include, and the risks
and uncertainties to which such forward-looking statements are
subject, are highlighted in the Company’s Management’s Discussion
and Analysis (“MD&A”) for the quarter ended September 30, 2018.
Actual results could differ materially from those contemplated by
such forward-looking statements because of any number of factors
and uncertainties, many of which are beyond NACG’s control.
Undue reliance should not be placed upon forward-looking statements
and NACG undertakes no obligation, other than those required by
applicable law, to update or revise those statements. For more
complete information about NACG, you should read the Company’s
disclosure documents filed with the SEC and the CSA. You may obtain
these documents for free by visiting EDGAR on the SEC website at
www.sec.gov or on the CSA website at www.sedar.com.
About the Company
North American Construction Group Ltd.
(www.nacg.ca) is a premier provider of heavy construction and
mining services in Canada. For more than 60 years, NACG has
provided services to large oil, natural gas and resource
companies.
For further information, please
contact:
David Brunetta, CPA, CMA Director, Investor RelationsNorth
American Construction Group Ltd. Phone: (780) 969-5574 Email:
dbrunetta@nacg.ca
PDF
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