Benzinga | Sep 28, 2020 08:37AM EDT

Enservco Closes Agreement With Lender To Amend Its Senior Revolving Credit Facility; Total Bank Debt Reduced By $16M

* Total bank debt reduced by $16 million -- from approximately $33 million to approximately $17 million

* Transaction results in $17.5 million increase in stockholders' equity when included with Chairman's recent investment fund conversion of $1.5 million of subordinated debt and accrued interest into Enservco restricted common stock

* Company preparing for expected seasonal increase in activity during upcoming heating season

DENVER, Sept. 28, 2020 (GLOBE NEWSWIRE) -- Enservco Corporation (NYSE:ENSV), a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries, today announced it has closed its refinancing agreement with East West Bank ("EWB").

The refinancing significantly strengthens Enservco's balance sheet by cutting its bank debt nearly in half and increasing shareholders' equity by approximately $17.5 million.

"We are extremely pleased to have finalized this transformational agreement with EWB that not only creates a more viable financial structure, but also adds EWB as a major equity holder," said Executive Chairman Rich Murphy, whose investment firm, Cross River Partners, is Enservco's largest shareholder. "With this lengthy process now behind us, we are excited to re-focus our full attention on building our business. We are gearing up to meet an expected seasonal increase in demand during our fourth quarter of 2020 and first quarter of 2021 when Enservco generates the majority of its revenue and profitability."

The new financing includes a $17 million term loan and a $1 million working capital revolving line of credit with no initial balance -- both of which have October 15, 2021, maturity dates. The term loan is interest only with potential for principal payments in the event Enservco reaches certain profit metrics. In return for the $16 million in debt reduction, Enservco issued to EWB eight million shares of restricted common stock that will not be tradeable for six months and 15 million common stock purchase warrants exercisable at $0.25 per share beginning October 15, 2021, through October 15, 2026. Complete details of the refinancing are available on the Form 8-K filed by Enservco with the SEC on September 28, 2020.