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Note 16 - Interest Bearing Loans
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

16.

Interest bearing loans

 

Amended and Restated Facility Agreement

 

On October 6, 2023, we amended and restated the previous revolving credit facility agreement pursuant to an amendment and restatement agreement (the “Amended and Restated Facility Agreement”) with DNB Bank ASA, London Branch, as agent, in order to extend the maturity of the revolving credit facility agreement. The maturity date of the Amended and Restated Facility Agreement is October 6, 2026. The Amended and Restated Facility Agreement increased the total commitments to $250.0 million. The Company has the ability to increase the commitments to $350.0 million.

 

Borrowings under the Amended and Restated Facility Agreement bear interest at a rate per annum of Term SOFR (as defined in the Amended and Restated Facility Agreement), subject to a 0.00% floor, plus an applicable margin of 3.75% (which is subject to a margin ratchet which reduces the margin in 4 step downs according to the Total Net Leverage Ratio (as defined in the Amended and Restated Facility Agreement)) for cash borrowings or 2.50% for letters of credit (which are similarly subject to a margin ratchet which reduces the margin in 4 step downs according to the Total Net Leverage Ratio). A 0.40% per annum fronting fee applies to letters of credit, and an additional 0.25% or 0.50% per annum utilization fee is payable on cash borrowings to the extent one-third or two-thirds, respectively, or more of Facility A (as defined in the Amended and Restated Facility Agreement) commitments are drawn. The unused portion of the Amended and Restated Facility Agreement is subject to a commitment fee of 35% per annum of the applicable margin.

 

On May 15, 2024, the Company established an incremental facility under its Amended and Restated Facility Agreement, in order to increase its existing $250.0 million revolving credit facility by an additional $90.0 million in commitments, to a total of $340.0 million, of which $256.7 million was available for drawdowns as loans and $83.3 million was available for letters of credit. The establishment of the incremental facility was accomplished by a notice entered into with DNB Bank ASA as Agent, together with a consortium of banks as lenders. The incremental facility has the same terms and conditions as the existing facility provided under the Amended and Restated Facility Agreement. The incremental facility is available for the same general corporate purposes as the existing facility provided under the Amended and Restated Facility Agreement, including acquisitions. On May 15, 2024, the Company drew down on the new facility in the amount of approximately $76.1 million to partially finance the Coretrax Acquisition.

 

As of  June 30, 2025, we had $121.1 million of long-term borrowings outstanding under the Amended and Restated Facility Agreement. The effective interest rate on our outstanding long-term borrowings was 7.0%. As of December 31, 2024, we had $121.1 million of long-term borrowings outstanding. We utilized $50.4 million and $48.5 million of the Amended and Restated Facility as of  June 30, 2025 and December 31, 2024, respectively, for bonds and guarantees. 

 

New Credit Facility

 

On  July 23, 2025, the Company and certain of its subsidiaries, including Exploration and Production Services (Holdings) Limited and Expro Holdings US Inc., as borrowers, entered into a senior secured revolving credit facility (the “New Credit Facility”) by and among, inter alia, DNB Bank ASA, London Branch, as agent, and other financial institutions as lenders (as amended and/or restated from time to time, the “Facility Agreement”), in an initial aggregate principal amount of up to $500 million, of which up to $400 million is available as revolving facility loans and up to $100 million is available as term bridge loans. Proceeds of the revolving facility under the Facility Agreement may be used for general corporate and working capital purposes. Proceeds of the bridge facility under the Facility Agreement may be used for acquisitions and investments and capital expenditure in relation to acquisitions and fees, costs and expenses in connection with the foregoing. The Facility Agreement replaces the Company’s existing senior secured revolving credit facility entered into on October 1, 2021 and as amended and restated pursuant to an amendment and restatement agreement on October 6, 2023. The maturity date of the New Credit Facility is July 30, 2029. 

 

All obligations under the Facility Agreement are guaranteed jointly and severally by the Company and certain of the Company’s subsidiaries incorporated in the United States, England and Wales, the Netherlands, Cyprus and Scotland. Going forward, the guarantors must comprise at least 80% of the EBITDA of the Company and its subsidiaries, as well as subsidiaries individually representing 5% or more of the EBITDA of the group, subject to customary exceptions and exclusions. In addition, the obligations under the Facility Agreement are secured by first priority liens on certain assets of the borrowers and guarantors, including pledges of equity interests in certain of the Company’s subsidiaries, including all of the borrowers and subsidiary guarantors, material operating bank accounts, intercompany loan receivables and, in the United States, England and Wales and Scotland, a floating charge over substantially all of the assets and property of the borrowers and guarantors incorporated in such jurisdictions, in each case subject to customary exceptions and exclusions. 

 

Borrowings under the Facility Agreement bear interest at a rate per annum consisting of the applicable floating rate, subject to a 0.00% floor, plus an applicable margin which increases or reduces in step ups and step downs according to Total Net Leverage (as defined in the Facility Agreement) from 2.00% to 3.25% for cash borrowings or 2.75% for any bridge loans (which are similarly subject to an upwards ratchet over time). An additional 0.10% or 0.20% or 0.40% per annum utilization fee is payable on cash borrowings to the extent one-third or two-thirds, respectively, or more of the commitments are drawn. The unused portion of the New Credit Facility is subject to a commitment fee of 35% per annum of the applicable margin. Interest on loans is payable at the end of the selected interest period. The Company and its subsidiaries paid certain customary fees and expenses in connection with the New Credit Facility.

 

The Facility Agreement retains various undertakings and affirmative and negative covenants (with certain agreed amendments) which limit, subject to certain customary exceptions and thresholds, the Company and its subsidiaries’ ability to, among other things, (1) enter into asset sales; (2) incur additional indebtedness; (3) make investments, acquisitions, or loans and create or incur liens; (4) pay certain dividends or make other distributions and (5) engage in transactions with affiliates. The Facility Agreement also requires the Company to maintain (i) a minimum interest cover ratio of 3.50 to 1.0 based on the ratio of EBITDA to net finance charges and (ii) a maximum total net leverage of 2.75 to 1.0 based on the ratio of total net debt to EBITDA, in each case tested quarterly on a last-twelve-months basis. The Facility Agreement also contains default provisions customary for facilities of this type, which are subject to customary grace periods and materiality thresholds, including, among others, defaults related to payment failure, failure to comply with covenants, material misrepresentations, bankruptcy and related events, material judgments and the invalidity or revocation of any loan document or any material guarantee. If the Company fails to perform its obligations under the Facility Agreement that results in an event of default, the commitments under the New Credit Facility could be terminated and any outstanding borrowings under the New Credit Facility may be declared immediately due and payable. The Facility Agreement also contains cross-default provisions that apply to the Company and its subsidiaries’ other indebtedness. Additionally, the Facility Agreement includes certain mandatory repayment events including disposal, illegality, the occurrence of a change of control or sale of substantially all group assets.