New West Energy Services Inc. (CVE:NWE) has entered into deals with a U.S.-based organization to buy a diversified fleet of gas and oil fluid transportation equipment, get a fresh revolving line of credit and refinance its existing debt obligations.
Gerry E. Kerkhoff, the CEO and President of New West, said that the company has recorded growing revenue from its waste management, transportation and environmental services with almost-full utilization of their equipment fleet. The revenue base, however, has been restricted by their operating line of credit and fleet size and, while the gas and oil industry is still struggling, the better results and now larger fleet and rise in accessible operating capital make company optimistic for upcoming growth.
This deal further diversifies their services into the closures and production units of the gas and oil industry and enables them to take on larger assignments with corresponding increased revenues. They consider that this contract is strategically vital for New West and will result in increasing value for company’s shareholders as the environment in the oil patch gets better.
Pursuant to a security and term loan deal, the Lender has advanced to New West’s operating subsidiary firm, Bearstone Environmental Solutions Inc., almost $1.2 million to repay sum owing under a term loan with subsidiary firm’s previous lender, and almost $4.8 million to buy a fleet of operating equipment, counting numerous combinations of bulk fluid transport tractors, tank trucks and trailers capable of carrying water for fracking processes and drilling.
New West reported that the first Loan is for 5 years’ term at an interest rate of 7% annually while the second Loan is for a period of 6-years for 7.2% per annum.
Following revolving term loan and security deal, the Lender has made accessible to Bearstone the revolving loan of up to $3 million.