- Move follows closure of generation projects in Libya, Yemen
- Company sees `reasonable prospect' of successful talks
APR Energy Plc, a supplier of temporary power plants, is trying to renegotiate loans for the second time this year after closing projects in Libya and Yemen.
Talks are at an early stage, as the company seeks “some relief with our covenants,” Chief Financial Officer Lee Munro said in an interview. “We’re having a productive dialogue with the banks and we do have some time here. We’re being very proactive to address the situation.”
APR expects to breach the terms of a credit facility when covenants are tested on Sept. 30, according to a statement on Wednesday, following a first-half loss, and the shutdown of projects in Libya and Yemen amid political instability. The Jacksonville, Florida-based company negotiated a higher leverage-ratio limit for $770 million of loans in March, after telling banks it might fail to meet the terms.
The company should be able to offset the terminated projects as it redeploys equipment, Munro said.
APR’s shares fell 4.5 percent to 79.25 pence at the close of trading in London. They have tumbled 57 percent this year.
“There is a reasonable prospect that the group will be able to successfully execute a renegotiation or refinancing,” the company said in the statement. Still, “there remains a material uncertainty as to the outcome which casts significant doubt upon the group’s ability to continue as a going concern.”
The company had $15.1 million of cash and equivalents at the end of June, and $617 million of gross debt. The leverage-ratio cap on its credit facility has been increased until the end of June 2016, the company said in a presentation. Net debt can equal a maximum of 4.75 times adjusted earnings before interest, tax, depreciation and amortization in September, it said.
APR increased its syndicated loan by $120 million to $770 million last year, according to a filing at the time. The $450 million revolving facility and $320 million term loan both mature in August 2019.