The seismic company secures new financing that greatly improves its debt position, but in exchange it must pay very high interest.
Seismic company PGS completes its refinancing plan, but must pay 13.5 percent interest on a new $1 billion loan, according to A message from the company.
The interest rate is the highest seen on a bond in the European market in recent years, according to Bloomberg. Overall, though, interest expense goes down, because the company takes on significantly less debt.
PGS confirms that it will continue to take care of reducing its debt, and therefore also its interest costs.
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The new bond loan is worth $450 million (4.8 billion kronor), and will help the company repay the $600 million loan that matures in March 2024.
— The deal significantly improves the company’s debt maturity profile, while still providing the flexibility to follow PGS’s deleveraging strategy without incurring significant costs to the company, the company wrote.
– Strong recovery
The debt at PGS has been a concern among the company’s investors. Before Christmas, the company brought in 1.5 billion in new capital from shareholders.
PGS now indicates that the offshore seismic market is on a strong rebound after several years of underinvestment in oil and gas exploration, combined with the dramatically changing energy security situation, leading to a strong increase in investment in exploration and production.
As a seismic company, PGS makes a living by collecting and selling basic data that oil companies use to find and drill for oil.
On the Oslo Stock Exchange, the company is valued at NOK 8.5 billion, after an increase of more than 200 percent last year.
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