Canyon Services Group Inc (TSX:FRC)
Shares Issued 22,148,533
Last Close 6/2/2008 $4.75
Wednesday June 04 2008 - News Release
Mr. Brad Fedora reports
CANYON SERVICES GROUP INC. (TSX:FRC) AMENDS ITS CREDIT FACILITIES
Canyon Services Group Inc. has amended its credit agreement with its existing lenderto update and restate the existing extendible facility and operating facility,and to add a non-revolving extendible term facility inthe amount of $11.4-million. The proceeds from the term facility will be usedto pay off Canyon's capital leases and to pay down its revolving creditfacilities. These amendments result in additional debt capacity and areduction in debt service costs of approximately $2.1-million per year.
Canyon's credit facilities now comprise an $11.4-million termfacility, a $20.0-million extendible facility, a $5.0-million operatingfacility and automotive equipment loans. Canyon's total and net debt remainunchanged with the new agreement. Proforma the amendment, Canyon has a totalof $10.6-million of capacity available to meet the company's working capitaland capital expenditure requirements.
The company's capital program for 2008, estimated at $4.0-million,includes transportation and storage equipment associated with increasedactivity out of its Grande Prairie operating base. These expenditures areexpected to be incurred in the second half of 2008.
Under the agreement, the new term facility bears interest at the bank'sprime lending rate plus 0.75 per cent and is repayable by way of blendedmonthly principal and interest payments based on a 20-year amortizationperiod. The term facility matures on May 30, 2010, and can be extended at thelender's option for successive two-year periods from the then current termmaturity date. Security for the term facility is a mortgage over the company'sland and buildings, and a general security agreement over all of the company'sassets.
The terms of the $20.0-million extendible facility ($14.4-million drawnpro forma the amendment) and the $5.0-million operating facility (nil drawnpro forma the amendment) remain unchanged. The extendible facility is subjectto renewal on May 29, 2009, at which time it can be extended at the lender'soption for 364 days, while the operating facility continues to be a demandrevolving facility.
