NG Energy signs credit and guarantee with Macquarie

By William Gullotti

Buffalo, N.Y., Feb. 8 – NG Energy International Corp. (f/k/a NGX Energy International Corp.) entered into a definitive credit and guarantee agreement with Macquarie Group on Thursday, according to a press release.

The agreement provides for up to $100 million in financing, of which $50 million is committed funding and the remaining $50 million available under an accordion feature, that matures Dec. 29, 2028.

At closing, $40 million of the committed total was advanced to the company with the remaining $10 million becoming available upon satisfaction of certain terms.

Interest will be term SOFR plus a maximum 850 basis point adjustment, which includes a step-down margin grid dependent on certain performance metrics. The company will also pay a 350 bps commitment fee on the unused portion of the $50 million in committed funding.

Borrowings are guaranteed by the company and its wholly owned subsidiaries, Bochica Investment Holdings Ltd., Pentanova BVI, Ltd. and MKMS Enerji Anonim Sirketi SA, and secured by a first priority lien over all of the company’s assets.

Proceeds from the agreement are intended to optimize the company’s balance sheet, reduce its overall leverage, guarantee work contracts with midstream partners and with the Agencia Nacional de Hidrocarburos in Colombia and for general corporate purposes.

Specifically, NG Energy intends to use the net proceeds as follows:

• Pay $26 million in fees to enable the conversion of approximately $52 million of debt owed to secured debentureholders;

• Use $14 million to pay existing shareholder loans, fund the debt reserve account, pay transaction fees and for general corporate purposes; and

• Use $10 million for future capital expenditure requirements.

At closing, the company also issued 20,742,857 bonus warrants to Macquarie. Each warrant has a $1 exercise price until Dec. 29, 2028 and is subject to a statutory four month holding period from the date of issue.

The oil and gas company is based in Vancouver, B.C.

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