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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2009
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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1-32693
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54-2091194 |
(State or other jurisdiction of
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(Commission
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(IRS Employer |
incorporation )
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File Number)
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Identification No.) |
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500 W. Illinois, Suite 100 |
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Midland, Texas
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79701 |
(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (432) 620-5500
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. |
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Entry into a Material Definitive Agreement |
On May 4, 2009, Basic Energy Services, Inc. (the Company) entered into Amendment and
Consent No. 1 (the Amendment) to Fourth Amended and Restated Credit Agreement, dated as
of October 3, 2003, amended and restated as of February 6, 2007 (the Existing Credit
Agreement; the Existing Credit Agreement, together with the Amendment, collectively
hereinafter being referred to as the Credit Agreement). The Amendment provides, among
other things, for the reclassification and extension of certain revolving commitments under the
Existing Credit Agreement. Other amendments include:
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changing the calculation of the Alternate Base Rate; |
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creating new applicable margins for Tranche B Revolving Loans with respect to ABR
and Eurodollar revolving loans; |
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increasing the applicable fee as it applies to Tranche B Revolving Loans; |
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altering the letter of credit expiration date to account for the differing maturity
dates of Tranche A Revolving Loans and Tranche B Revolving Loans; |
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adding supplementary provisions in the case of a defaulting lender under the Credit
Agreement, including provisions related to (i) the reallocation of swingline exposure
or letter of credit exposure, (ii) the funding of swingline loans and (iii) the
issuance, amendments to or increases in any letters of credit; |
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altering the maximum leverage ratio; |
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permitting investments and prepayments of unsecured indebtedness of up to $50
million in the aggregate; and |
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consent for the organization of two new subsidiaries to conduct operations in
Mexico. |
The Existing Credit Agreement provided for revolving loans to be made to the Company, with
such revolving loans having a maturity date of December 15, 2010. Under the Amendment, certain
revolving loans are reclassified as (i) Tranche A Revolving Loans, which have the same maturity
date as that of revolving loans under the Existing Credit Agreement, and (ii) Tranche B Revolving
Loans, which have an extended maturity date of January 31, 2012. Revolving lenders are accordingly
reclassified into two groups: those who agreed to extend the maturity date for their revolving
commitments are deemed Tranche B Revolving Lenders, and the other revolving lenders are deemed
Tranche A Revolving Lenders. The Amendment did not change to total amount of the revolver. The
amount of commitments under the Tranche A Revolving Loans is $80 million and the amount under the
Tranche B Revolving Loans is $145 million. Lenders remaining in the Tranche A Revolving Loans
continue to receive the same pricing as applicable under the Existing Credit Agreement. Lenders
committing to the Tranche B Revolving Loans will receive an up-front fee, an increase in the
undrawn commitment fee and an increase in the pricing spread grid based on specified leverage ratio
ranges.
The Amendment also altered the interest rate payable on the revolving loans. For Tranche A
Revolving Loans and Tranche B Revolving Loans, ABR Loans will bear interest at the highest of (i)
the banks prime rate, (ii) the federal funds rate plus 0.50% per year, and (iii) the adjusted
LIBOR rate for an interest period of one-month beginning on the day of the ABR Loan plus 100 basis
points, plus an applicable margin. The applicable margin for ABR Loans ranges from 0.25% to 0.50%
for Tranche A Revolving Loans and ranges from 2.50% to 3.50% for Tranche B Revolving Loans. While the applicable
margins for Tranche A Revolving Loans remained unchanged for both ABR and Eurodollar revolving
loans, the applicable margin for Eurodollar revolving loans with respect to any Tranche B Revolving
Loan ranges from 3.50% to 4.50%. Furthermore, the applicable
commitment fee for the unused portion of any Tranche B revolving
commitments, based on average daily unused amounts, is 1.0% per annum,
as compared to 0.375% per annum for Tranche A revolving commitments.
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The Existing Credit Agreement contained various restrictive covenants and compliance
requirements. Under the Amendment, the maximum leverage ratio permitted is 3.25 to 1.00 from April 1,
2007 to the Amendment effective date, increasing to 3.75 to 1.00 on the effective date of the
Amendment and thereafter.
The Amendment also provides for the creation of two new subsidiaries in connection with oil
field services that may be performed in Mexico.
Costs associated with the Amendment will be amortized over the extended life of this credit
facility. A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
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Item 2.02 |
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Results of Operations and Financial Condition. |
On May 6, 2009, Basic Energy Services, Inc. issued a press release reporting financial results
for the first quarter ended March 31, 2009. A copy of the press release is being furnished as
Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not
subject to the liabilities of that section and is not deemed incorporated by reference in any
filing of Basics under the Securities Act of 1933, as amended, unless specifically identified
therein as being incorporated therein by reference.
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Item 2.03 |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant. |
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
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Item 9.01 |
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Financial Statements and Exhibits. |
Exhibit 10.1 Amendment and Consent No. 1 to Fourth Amended and Restated Credit Agreement dated
May 4, 2009.
Exhibit 99.1 Press release dated May 6, 2009.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Basic Energy Services, Inc.
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Date: May 6, 2009 |
By: |
/s/ Alan Krenek
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Name: |
Alan Krenek |
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Title: |
Senior Vice President, Chief Financial Officer, Treasurer and Secretary |
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4
EXHIBIT INDEX
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Exhibit Number |
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Description |
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10.1 |
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Amendment and Consent No. 1 to Fourth Amended and Restated Credit
Agreement dated May 4, 2009. |
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99.1 |
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Press release dated May 6, 2009. |