Whitehorn Merchant Capital Inc. assisted Leader Energy Services Ltd. (“Leader”) raise a $16.0 million asset-based lending facility. The facility is comprised of a demand, revolving facility of up to $4.0 million and a nonrevolving term loan of up to $12.0 million. Leader is a publicly traded oilfield service company focused on providing well stimulation services through coiled tubing and nitrogen pumping services.
Leader used the funds provided to repay its previous credit facilities and to fund working capital. The new facility carries a higher borrowing cost than a conventional bank facility but contains no financial covenants and has a term of only 12 months with an option to extend for an additional six months.
Whitehorn worked with Leader’s management to review and critique many different financial solutions from numerous lenders. Management chose the successful lender based on the flexibility of the facility, the speed with which the provider was able to close and the short term of the facility. The selected facility had the following key attributes:
- A mix of committed and demand facilities;
- Interest rate of 18% per annum;
- Term of 12 months, with a borrower’s option to extend for an additional 6 months
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