Hamilton, Bermuda (October 13, 2020)
Archer Limited (“Archer” or the “Company”) is pleased to announce that its syndicate banks (the “Lenders”) have agreed to certain amendments to the USD 580 million multicurrency term and revolving credit facility (the “Facility”) maturing October 1, 2023 (the “Maturity”). The amendments are conditioned on satisfactory documentation.
To increase the Company’s financial flexibility, the Lenders have agreed to certain amendments in the Facility, including a temporary increase in the net interest bearing debt to 12 months rolling EBITDA covenant (“Leverage Ratio”). The increase in the Leverage Ratio covenant path permits a ratio of 7.5:1 in 2021, with a gradual reduction to 5:1 at Maturity.
In the current downturn, Archer have continued to generate positive cash flow from operations, securing a liquidity position that exceeds the requirements going forward. In exchange for the covenant amendments, Archer has therefore proposed to prepay the instalments under the Facility that is due in 2021 and first quarter 2022, totaling USD 20 million (the “Prepayment”). This Prepayment does not change the total amortization prior to Maturity in 2023. At the end of Q2, our available liquidity was USD 118 million.
Espen Joranger, CFO of Archer stated “With the outbreak of Covid-19 in March 2020, Archer took the necessary measures to first and foremost secure our operations and the safety of our employees and customers. In addition, it has been of upmost importance to safeguard our liquidity, and I’m therefore very pleased with our continued ability to generate positive cash flow from operations. Our solid liquidity and cash flow generation have increased our flexibility and further strengthened our good relationship with our lenders.
The amendments to covenants are a precautionary measure as a result of the current weak market- conditions following the Covid-19 outbreak. Following these amendments, and despite the severe challenges the industry is facing, we expect to be compliant with all covenants under our main loan facility going forward, while maintaining robust available liquidity.”
For further information please contact:
Chief Financial Officer
Telephone: (+47) 982 06 812
Telephone: (+47) 482 78 748
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.