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Emeco (ASX:EHL) - Managing Director, Ian Testrow - The Market Herald
Managing Director, Ian Testrow
Source: The Australian
  • Mining services solutions provider Emeco (EHL) has repaid $195 million in debt notes to save $19 million per year in interest
  • The repayment of the debt notes was partly funded by a recent $149 million capital raise
  • The move is part of the company's strategy to restructure and streamline its financing arrangements
  • The move has secured the long-term liquidity of the company, with access to $153 million in cash and credit
  • Remaining debt maturities have also been pushed back by two years
  • Emeco closed Friday's session 1.24 per cent lower at 80 cents

Mining services solutions provider Emeco (EHL) has repaid $195 million in debt notes to save $19 million per year in interest.

The repayment of the debt notes was partly funded by a recent $149 million capital raise.

The company had previously refinanced $247 million worth of the debt notes, originally due in March 2022, to extend the debt maturity to March 2024.

Now the remaining $195 million has been repaid, Emeco has been able to activate an option to extend the maturity of its $97 million revolving credit facility to September 2023.

The move has secured the long-term liquidity of the company, with access to $153 million, comprising $56 million cash on hand and the $97 million undrawn revolving credit facility.

Emeco Managing Director and CEO Ian Testrow says the moves have consolidated the company's balance sheet.

"We are pleased to complete the package of initiatives that provide Emeco with the strongest balance sheet in our history as a public company with net leverage of 0.9x," Ian said.

"We are excited to now be in a position to have the flexibility to implement a complete capital allocation framework, including distributions to shareholders in the future, as appropriate," he continued.

"With longer tenor on significantly reduced total debt and lower interest expense, we are set to generate strong free cash flow in the years ahead. This allows the Emeco team to fully focus on running the business and continue our evolution to becoming a leading mining services solutions provider," he concluded.

Aside from the obvious interest savings, the restructuring has offered the company considerable flexibility going forward.

Emeco closed Friday's session 1.24 per cent lower at 80 cents.


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