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Tadawul-listed oil and gas drilling company Ades Holding has upsized an existing syndicated loan, securing an additional USD 3 bn in funding for expansion and spending on general corporate purposes, it said in a disclosure to Tadawul (pdf). It secured the additional funding from the majority of existing lenders along with new local and regional financial institutions, Ades said.
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Who’s in: New and existing lenders include Saudi Awwal Bank, Riyad Bank, Al Rajhi Banking and Investment Corporation, Arab National Bank, Saudi National Bank, Alinma Bank, Banque Saudi Fransi, Aljazira Bank, Arab Petroleum Investments Corporation and Commercial Bank of Dubai.
The rationale: “The significantly upsized syndication will provide ADES with the financial
flexibility to capitalize on new potential growth opportunities, including acquisitions and organic growth,” Ades said. Ades CEO Mohamed Farouk said the additional funding would “further strengthen our purchasing power, providing us with greater flexibility to consider and act swiftly on value-accretive acquisitions and other growth opportunities, all while maintaining sustainable leverage levels.”
Diving in: The additional funding is divided into two tranches — a standby term tranche of USD 2.7 bn and a revolving credit facility of USD 300 mn, according to the disclosure. They would be provided in both USD and SAR in a 38.5% and 61.5% split. The standby term tranche runs for 8.5 years and matures December 2032 with a 12-months grace period, while the revolving credit facility tranche runs for eight years until June 2032. Repayment for funds used under the standby term tranche will be made on a semiannual basis and includes a bullet repayment of 31.5% at the final maturity date.
Snapshot of its 1Q 2024 earnings: Ades’ net income more than doubled y-o-y to SAR 200.8 mn in 1Q 2024 while its revenues rose 60.5% y-o-y to SAR 1.5 bn over the period. It attributed the growth in its top line to booking more business in the Kingdom, fueled by the deployment of 19 rigs as part of a large tender.
