Omni Set to Cut Interest Costs by $1.5M

Omni Energy Services Co. has received a commitment letter to complete $64.5 million of new senior credit facilities with a syndicate of lenders led by LaSalle Business Credit, LLC ("LaSalle"), a wholly owned subsidiary of LaSalle Bank, N.A. and an affiliate of ABN AMRO, a Netherlands-based bank with a worldwide presence in over 60 countries.

When completed, the Company will initially draw down approximately $48.0 million under the Senior Credit Facilities (i) to re-finance certain long-term debt, (ii) to repay its mezzanine debt and (iii) to provide working capital to complete the previously announced acquisitions of Charles Holston, Inc. and certain assets of Cypress Energy. Closing of the Senior Credit Facilities is subject to negotiation and completion of mutually satisfactory loan agreements and approval of Omni's Board of Directors.

The new Senior Credit Facilities will include a $39.5 million term loan ("Term Loan") and a $25.0 million working capital revolving line of credit ("Revolver"). Borrowings under the asset-based Term Loan will be determined by pre-set advance rates against the agreed upon value of the Company's currently owned and to be acquired seismic, environmental, rental and transportation equipment. The Term Loan amortizes over 60 months with level amortization payments. Principal and interest payments are due quarterly with interest accruing at the initial rate of 90-day LIBOR plus 2%, or the prime interest rate, at the Company's option.

The Company also said its new Revolver will increase from $15.0 million to $25.0 million. Availability under the Revolver will be based upon the Company's level of eligible accounts receivable and inventories of spare parts. The Revolver also matures in 60 months and will initially accrue interest at LIBOR plus 2%, or the prime interest rate, at the Company's option.

Commenting on the new Senior Credit Facilities, James C. Eckert, Chief Executive Officer of the Company, said, "These new Senior Credit Facilities will be another exciting component of our business model for continued expansion and growth of Omni. The new Senior Credit Facilities, coupled with strong positive cash flow expected for the 2007-year will position Omni to continue aggressively pursuing strategic acquisitions and necessary organic growth. Now these efforts will be bolstered using much more favorable cost of employed capital."

"A portion of the proceeds from our new Senior Credit Facilities will initially be used to repay certain senior and mezzanine debt outstanding under existing credit facilities. The new Senior Credit Facilities will include more favorable interest rates than on our previous borrowings, reflecting Omni's enhanced credit worthiness. As a result of these more favorable interest rates we would expect to reduce our annual interest expense by approximately $1.5 million on equivalent borrowings. Also, the affiliation with LaSalle offers us the capacity to continue expanding our operations through strategic growth initiatives."

Headquartered in Carencro, La., Omni Energy Services Corp. offers a broad range of integrated services to geophysical companies engaged in the acquisition of on-shore seismic data and to oil and gas companies operating primarily in the Gulf of Mexico. Omni provides its services through three business divisions: Seismic Drilling (including drilling, survey and permitting services), Environmental Services and Equipment Leasing.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


Brent Crude Oil : $54.33/BBL 0.81%
Light Crude Oil : $51.5/BBL 1.29%
Natural Gas : $3.75/MMBtu 1.35%
Updated in last 24 hours