Connacher has closed its previously announced US $50 million revolving credit facility ("facility"). The two year facility will be available for general corporate purposes and is being provided by a syndicate of Canadian and international banks. In conjunction with the closing of this new facility, Connacher cancelled an outstanding cash-collateralized letter of credit facility. Related cash in the amount of $10 million will accordingly be moved from a previously-restricted category on the company's balance sheet and will also be available for general corporate purposes.
The new US $50 million credit facility will provide Connacher with additional liquidity and financial flexibility. It will facilitate the issuance of letters of credit and the conduct of hedging activities. The facility is secured by a first priority security interest in all of the present and after- acquired assets of Connacher, except Connacher's holdings of Petrolifera Petroleum Limited shares and the assets of Great Divide Pipeline Corporation, which is presently an inactive subsidiary. The facility ranks senior to Connacher's outstanding long term indebtedness, as was contemplated when Connacher issued its first lien secured notes earlier in 2009.
In the opinion of Connacher, the provision of this facility in the current economic and credit environment underscores the confidence held by both the lending institutions and by Connacher in the company's current activity and future prospects.
Connacher anticipates limited current use of the facility for other than letters of credit as it has surplus cash and available adjusted funds from operations to meet its anticipated capital expenditures and financial requirements for the balance of 2009 and as forecast for 2010.
Nevertheless, access to the additional liquidity and financial flexibility further strengthens the company's overall financial condition and completes the process of repositioning the company to not only complete Algar but also to contemplate further growth beyond the 2010 period, in its overall pursuit of realizing 50,000 bbl/d of bitumen production by 2015.
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