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THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW/
RED DEER, AB, March 11 /CNW/ - High Arctic Energy Services Inc. (TSX: HWO) ("High Arctic" or the "Corporation") announced that it has signed an amendment to its credit facilities. The Corporation currently owes $126.4 million under its senior credit facilities. As explained in the Corporation's Management Discussion and Analysis for the nine months ended September 30, 2007, it was anticipated that the Corporation would require new financing by February 10, 2008 of about $25 million to enable it to reduce its debt to the levels required to meet its covenant requirements. One of those covenant requirements was that the consolidated leverage ratio had to be 4:8 to 1:0 based on a calculation to be completed on February 11, 2008. Under the terms of an amendment announced on February 8, 2008, that requirement was extended to March 11, 2008. With the latest amendment, that reduced ratio requirement has been further extended to April 11, 2008.
The extended period to meet the reduced consolidated leverage requirement allows the Corporation additional time to find sources of capital. The alternatives being pursued by the Corporation include obtaining new credit facilities, raising cash from the sale of assets, negotiating further amendments with the current lenders or some combination thereof. The current lenders have not made any commitment as to future amendments they may be prepared to accept. The current lenders may require the Corporation to reduce the current credit facility by an amount greater than $25 million. For the Corporation to meet the April 10, 2008 requirement, the required payment could exceed $50 million which the Corporation is unlikely to achieve. The Corporation will issue further press releases as more information becomes available.
Forward-Looking Statements
This news release may contain forward-looking statements relating to expected future events and financial and operating results of the Corporation that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed in the Corporation's Management Discussion and Analysis for the nine months ended September 30, 2007 and in High Arctic's Annual Information Form for the year ended December 31, 2006 and High Arctic's Information Circular dated May 29, 2007, all found on SEDAR (www.sedar.com). Due to the potential impact of these factors, the Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
About High Arctic
The Corporation, through its subsidiaries, is a global provider of specialized oilfield equipment and services, including drilling, completion and workover operations. Based in Red Deer, High Arctic has domestic operations in Alberta, British Columbia and the Northwest Territories. International operations are currently active in Mexico, the Middle East, Northern Africa and Asia.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this news release.
%SEDAR: 00025582E