e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 2007
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
Delaware
|
|
1-32693
|
|
54-2091194 |
(State or other jurisdiction of
incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.) |
|
|
|
400 W. Illinois, Suite 800
Midland, Texas
(Address of principal executive offices)
|
|
79701
(Zip Code) |
Registrants telephone number, including area code: (432) 620-5500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2 below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On February 6, 2007, Basic Energy Services, Inc. amended and restated our existing credit
agreement by entering into a Fourth Amended and Restated Credit Agreement with a syndicate of
lenders (the 2007 Credit Facility). The amendments contained in the 2007 Credit Facility
included:
|
|
|
eliminating the $90 million class of Term B Loans; |
|
|
|
|
creating a new class of Revolving Loans, which increased the lenders total revolving
commitments from $150 million to $225 million |
|
|
|
|
increasing the Incremental Revolving Commitments under the 2007 Credit Facility
from $75.0 million to an aggregate principal amount of $100 million; |
|
|
|
|
changing the applicable margins for Alternative Base Rate or Eurodollar revolving loans; |
|
|
|
|
increasing our letter of credit exposure from $20.0 million to $30.0 million; |
|
|
|
|
eliminating our requirement to maintain an interest rate hedge after the Term B Loans were discharged or paid; |
|
|
|
|
amending our negative covenants relating to our ability to incur indebtedness and
liens, to add tests based on a percentage of our consolidated tangible assets in
addition to fixed dollar amounts, or to increase applicable dollar limits on baskets or
other tests for permitted indebtedness or liens; |
|
|
|
|
amending our negative covenant relating to our ability to pay dividends, or
repurchase or redeem our capital stock, in order to conform more closely with permitted
payments under our senior notes; and |
|
|
|
|
eliminating certain restrictions on our ability to create or incur certain lease
obligations. |
Under the 2007 Credit Facility, Basic Energy Services, Inc. is the sole borrower and each of
our subsidiaries is a subsidiary guarantor. The 2007 Credit Facility provides for a $225 million
revolving line of credit (Revolver). The 2007 Credit Facility includes provisions allowing us to
request an increase in commitments of up to $100.0 million aggregate principal amount at any time.
Additionally, the 2007 Credit Facility permits us to make greater expenditures for acquisitions,
capital expenditures and capital leases and to incur greater purchase money obligations,
acquisition indebtedness and general unsecured indebtedness. The commitment under the Revolver
provides for (1) the borrowing of funds, (2) the issuance of up to $30 million of letters of credit
and (3) $2.5 million of swing-line loans. All the outstanding amounts under the Revolver are due
and payable on December 15, 2010. The 2007 Credit Facility is secured by substantially all of our
tangible and intangible assets. We incurred approximately $0.7 million in costs in connection
with the 2007 Credit Facility. We will also expense approximately $0.9 million in debt issuance costs in connection with the 2007 Credit Facility.
At our option, borrowings under the Revolver bears interest at either (1) the Alternative
Base Rate (i.e., the higher of the banks prime rate or the federal funds rate plus .50% per year)
plus a margin ranging from 0.25% to 0.5% or (2) an Adjusted LIBOR Rate (equal to (a) the London
Interbank Offered Rate (the LIBOR rate) as determined by the Administrative Agent in effect for
such interest period divided by (b) one minus the Statutory Reserves, if any, for such borrowing
for such interest period) plus a margin ranging from 1.25% to 1.5%. The margins vary depending on
our leverage ratio. Fees on the letters of credit are due quarterly on the outstanding amount of
the letters of credit at a rate ranging from 1.25% to 1.5% for participation fees and 0.125% for
fronting fees. A commitment fee is due quarterly on the available borrowings under the Revolver at
a rate of 0.375%.
At February 6, 2007,
after giving effect to the amendments under the 2007 Credit Facility, we had
no outstanding borrowings under the Revolver.
Pursuant to the 2007 Credit Facility, we must apply proceeds from certain specified events to
reduce principal outstanding under the Revolver, including:
|
|
|
assets sales greater than $2.0 million individually or $7.5 million in the aggregate
on an annual basis; |
|
|
|
|
100% of the net cash proceeds from any debt issuance, including certain permitted
unsecured senior or senior subordinated debt, but excluding certain other permitted debt
issuances; and |
|
|
|
|
50% of the net cash proceeds from any equity issuance (including equity issued upon
the exercise of any warrant or option). |
The 2007 Credit Facility contains various restrictive covenants and compliance requirements,
including the following:
|
|
|
limitations on the incurrence of additional indebtedness; |
|
|
|
|
restrictions on mergers, sales or transfer of assets without the lenders consent; |
|
|
|
|
limitation on dividends and distributions; and |
|
|
|
|
various financial covenants, including: |
|
|
|
a maximum leverage ratio of 3.50 to 1.00, reducing to 3.25 to 1.00 on April 1, 2007, and |
|
|
|
|
a minimum interest coverage ratio of 3.00 to 1.00. |
2
A copy of the 2007 Credit Agreement is filed as Exhibit 10.1 to this Form 8-K and is
incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
|
|
|
|
|
10.1 |
|
|
Fourth Amended and Restated Credit Agreement dated as
of October 3, 2003, amended and restated as of February 6, 2007, among
Basic Energy Services, Inc., the subsidiary guarantors party thereto, Bank
of America, N.A., as syndication agent, Capital One, National Association,
as documentation agent, BNP Paribas, as documentation agent, UBS AG,
Stamford Branch, as issuing bank, administrative agent and collateral
agent, and the lenders party thereto. |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
Basic Energy Services, Inc.
|
|
Date: February 12, 2007 |
By: |
/s/ Alan Krenek
|
|
|
|
Alan Krenek |
|
|
|
Senior Vice President, Chief Financial Officer,
Treasurer and Secretary |
|
4
EXHIBIT INDEX
|
|
|
|
|
Exhibit No. |
|
|
Description |
|
|
10.1 |
|
|
Fourth Amended and Restated Credit Agreement dated as of October 3,
2003, amended and restated as of February 6, 2007, among Basic Energy Services,
Inc., the subsidiary guarantors party thereto, Bank of America, N.A., as
syndication agent, Capital One, National Association, as documentation agent, BNP
Paribas, as documentation agent, UBS AG, Stamford Branch, as issuing bank,
administrative agent and collateral agent, and the lenders party thereto. |