Business
Western Energy Services Corp. closes Grenville acquisition, sells well testing assets for $1.575 million and secures $6.4 million Bank Financing
Western Energy Services Corp. closes Grenville acquisition, sells well testing assets for $1.575 million and secures $6.4 million Bank Financing.
About this update from Western Energy Services Corp.
[{"type":"text","content":"\n\n\n\n/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/\n\n\nCALGARY, May 17 /CNW/ - Western Energy Services Corp. ("Western") is\npleased to announce that it has closed its previously announced purchase of\nGrenville Energy Partnership's ("Grenville") oilfield service equipment (the\n"Equipment") for $12.5 million, effective January 1, 2007, as previously\nannounced on March 28, 2007. The acquisition was funded by the issuance of an\n$8.7 million convertible note (the "Note") and a new credit facility with a\nCanadian chartered bank. Grenville has provided equipment financing to Western\nthrough a revenue sharing joint venture since July 2005. Under the joint\nventure, the Equipment was owned by Grenville and operated by Western.\nWestern's acquisition of the Equipment results in the termination of the joint\nventure, such that Western now has full ownership of the Equipment, receiving\nall revenue therefrom, effective January 1, 2007.\n\n\nWestern also announces the closing of the sale of its well testing assets\nto TestAlta Services Ltd. for the cash purchase price of $1.575 million, as\npreviously announced on April 18, 2007.\n\n\n"The closing of these transactions and securing bank financing has\nsimplified our company and has given us the means to continue Western's focus\nof becoming a strong stimulation company with emphasis on production\noptimization" stated Jim McQuarrie, President and CEO of Western.\n\n\nWestern's new banking facility is a $6.4 million term loan due on demand\nbut otherwise repayable over a 60 month period, bearing interest at prime plus\n1.5% and secured by a charge over the present and after acquired property of\nWestern and its wholly owned subsidiary StimSol Canada Inc. The banking\nfacility was used toward the purchase price of the Equipment, to repay a\ndemand term loan of $650,000 and extinguish revolving credit facilities of\n$1.5 million.\n\n\nThe Note has a one year maturity, bears interest at 8%, payable monthly,\nis convertible at the option of the holder into common shares of Western at\n$0.20 per share, may be repaid by Western at any time without penalty and is\nsecured on a subordinated basis to Western's bank and its bridge loan lender\nby equipment having a book value of approximately $17 million. Western can\nforce the conversion ...