Southern Energy Corp (TSX-V:SOU, AIM:SOUC, OTC:MAXMD) has announced the fifth amendment to its existing senior secured term loan.
The company said in a statement that the amendment includes the extension of the Tranche B availability to August 31, 2025, and a US$2 million increase to the Tranche B commitment for a total Tranche B commitment of US$31.5 million.
Upon execution of the fifth amendment, Southern noted that it will have approximately US$11.5 million of capacity remaining on the credit facility, with a current outstanding balance of approximately US$17.6 million.
Southern said the amendment also extends the principal amortization period by an additional 12 months while maintaining the existing 12% per annum coupon, resets the debt service coverage ratio covenant calculation to an annualized basis beginning in the fourth quarter of 2023 and allows for repayment and reborrowing under the Tranche B facility.
"The amendments to the credit facility from our existing credit provider provides additional flexibility and credit capacity to support our strategy to grow both inorganically and organically with long-term development operations in the Gwinville Field to maximize leveraged returns for shareholders," Southern chief financial officer Calvin Yau commented.
In connection with the fifth amendment, Southern said it agreed to extend the term of 3,906,250 outstanding common share purchase warrants previously issued to the lender from April 30, 2024, until August 31, 2025. The extension of the term of the bonus warrants remains subject to the final approval of the TSX Venture Exchange, it added.
Southern Energy is focused on natural gas exploration and production, with operations primarily in the southeast Gulf States of Mississippi, Louisiana, and East Texas.
Contact the author at stephen.gunnion@proactiveinvestors.com