Divergent Energy Services Corp.
TSX VENTURE : DVG

July 02, 2014 09:00 ET

Divergent Energy Services Corp. Announces Secured Revolving Credit Facility (CAD$17.5 Million)

CALGARY, ALBERTA--(Marketwired - July 2, 2014) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Divergent Energy Services Corp. (TSX VENTURE:DVG) (the "Corporation") announces that it has secured a CAD$17.5 million revolving credit facility subject to the successful completion of outstanding due diligence, legal documentation by the Lender, satisfaction of other conditions precedent in favour of the lender, debenture holder approval and release of its general security agreement over the assets of the Corporation, regulatory approvals, and approval from the Corporation's Board of Directors.

The revolving credit facility (the "Facility"), which will be renewed annually, will have a one year term and will have a first charge over the assets of the Corporation. The Facility will consist of two tranches, each of which will be subject to certain conditions being met prior to advancement to the Corporation:

  • Facility A: CAD$10 million will be available for pipe and pump projects in Canada, US and Mexico, and it will be margined against inventory and accounts receivable;
  • Facility B: CAD$7.5 million will be available for eligible construction financing and management projects in Mexico, and it will be margined against the outstanding advances provided by the Corporation.

Interest on amounts drawn will be payable monthly at the rate of 14% per annum, with a standby rate of 1% per annum on the unused portion. Payment of the outstanding principal amount will be made prior to or at the end of the term. In addition, the Corporation is to pay a facility fee of 1% of the Facility initially and 2% of the Facility at the end of the term.

The Corporation will be required to pay a 2% finder's fee of the eligible Facility to an unrelated third party over the term of the Facility.

The Facility will be used for expansion opportunities in all three of the Corporation's operating segments: Pump Sales and Service, Pipe Sales and Installation, and Project Management and Finance.

Headquartered in Calgary, Alberta, Divergent Energy Services Corp. provides an array of specialized products and services that are used in the energy, mining, and industrial & agricultural water industries.

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the terms of the Facility and the expected use of proceeds therefrom. The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by the Corporation, including, without limitation, expectations and assumptions concerning the success of future operating activities. Although the Corporation believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Corporation can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing of the Offering, risks associated with the oil and gas industry in general, uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations, unexpected adverse weather conditions and changes to existing laws and regulations. Forward-looking statements are based on estimates and opinions of management of the Corporation at the time the information is presented. The Corporation may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but the Corporation undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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