Eveready Inc.
TSX : EIS

Eveready Inc.

April 14, 2009 08:00 ET

Eveready Renews Revolving Credit Facility

EDMONTON, ALBERTA--(Marketwire - April 14, 2009) - Eveready Inc. ("Eveready") (TSX:EIS) is pleased to announce that, subject to final documentation, it will renew its revolving credit facility ("Revolver") with a syndicate of lenders co-led by a Canadian affiliate of GE Energy Financial Services and Canadian Imperial Bank of Commerce.

"We are pleased to continue our strong relationship with our syndicate of lenders," comments Jason Vandenberg, Eveready's Chief Financial Officer. "Not only will this renewal provide us with additional financial flexibility in this time of economic uncertainty, it will also help position us to capture future growth opportunities as the oil and gas industry recovers."

In the first quarter, Eveready utilized cash from operating activities to reduce the outstanding amount borrowed under its Revolver by approximately $25 million. The outstanding balance of Eveready's Revolver as at March 31, 2009 was $45 million. As part of the renewal, Eveready will slightly reduce the total amount available under its Revolver to $95 million from $100 million previously.

The Revolver requires payments of interest only and is renewable annually subject to Eveready's and the lending syndicate's consent. The next renewal date for the Revolver will be in April 2010. If the Revolver is not renewed in April 2010, the outstanding credit facility would then be subject to a 12-month interest only phase followed by 12-month straight-line amortization period. Eveready's $150 million term loan ("Term"), with the same syndicate of lenders, continues to require fixed monthly payments of $125 thousand and a balloon payment of $142.5 million due in May 2012.

Amounts borrowed under the above credit facilities bear interest, at Eveready's option, at bank prime or bankers' acceptance rates, plus a credit spread based on a sliding scale. Concurrent with the renewal, the credit spreads applicable to Eveready's Revolver and Term facilities will increase by between 200 and 225 basis points. A stand-by fee calculated at a rate of 0.50% per annum will also apply to the unused portion of the Revolver (compared to a rate of 0.25% per annum previously). Based on current market rates, the effective interest rate on Eveready's Revolver and Term credit facilities, after factoring in the above credit spreads will be 5.41%.

The credit renewal is expected to close on or about April 23, 2009.

About Eveready

Eveready is a growth oriented company that provides industrial maintenance and oilfield production services to the energy, resource, and industrial sectors. Operating from 79 locations in Canada, the United States, and internationally, Eveready currently employs over 2,800 employees and operates a service fleet of over 2,400 truck and trailer units. The Shares of Eveready trade on the Toronto Stock Exchange under the trading symbol "EIS".

Forward-looking statements

This press release contains forward-looking statements which reflect Eveready's current beliefs and are based on information currently available to Eveready. These statements require Eveready to make assumptions it believes are reasonable and are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond Eveready's control. Examples of such forward-looking statements in this press release include, but are not limited to, the Revolver renewal: (i) providing Eveready with additional financial flexibility; (ii) helping position Eveready to capture future growth opportunities; and (iii) expecting to close on or about April 23, 2009. The forward-looking statements rely on certain assumptions, including, among others: achievement of Eveready's internal revenue, net earnings and cash flow forecasts for 2009; ability to execute Eveready's growth strategies, ability to obtain final approval of the renewal from Eveready's syndicate, and continued requirement by Eveready's customers for its wide range of services to meet the variety of customers' needs. Risk factors and other uncertainties that could cause actual results to differ materially include, but are not limited to: certain political and economic conditions; fluctuations in the market for oil and gas and related products and services; workforce availability; competition; and availability of future debt and equity financing.

Contact Information

  • Eveready Inc.
    Rod Marlin
    President & CEO
    (780) 451-6075
    (780) 451-2142 (FAX)
    or
    Eveready Inc.
    Jason Vandenberg
    CFO
    (780) 451-6075
    (780) 451-2142 (FAX)
    Website: www.evereadyinc.com