ADES Holding Secures Additional Financing of $3 Billion
Summary
ADES Holding Company (2382) has secured an additional USD 3 billion (SAR 11.3 billion) following the successful amendment of an existing joint credit facility.ADES notes that the additional financing aims to support its ambitious expansion plans.The majority of current lenders participated, along with new local and regional financial institutions.The new financing is divided into the following:ADES hopes that the recent increase in the joint credit facility will provide significant financial flexibility, allowing it to exploit future growth opportunities.This could be through acquisitions or by expansion in new and existing markets.It is noteworthy that the Saudi company, headquartered in Khobar, operates a fleet of offshore and onshore drilling rigs in the Middle East, North Africa, and India.ADES revealed that the financing terms are as follows:The company added that the guarantees provided for the financing include: Stock mortgages on entities owning onshore or offshore rigs as required. Assignment of receivables under insurance contracts related to financed rigs.The company explained that the purpose of the capital expenditure tranche is to finance the capital spending necessary to achieve the groups expansion goals.The revolving credit facility tranche will be used for the companys general purposes.ADES announced the extension of a contract for one of its conventional offshore jack-up rigs operating in Saudi Arabia for a 10-year mandatory period.This duration is longer than the usual contract extensions for similar assets globally.The total accumulated value of the contract extension is approximately SAR 1.3 billion (USD 351 million).The company noted that the contract extension with a major national oil company is for the operation of its rig Admarine 657.It is expected to come into effect in the third quarter of this year, once the current contract term for the rig ends.Mohamed Farouk, CEO of ADES Holding, stated that the extension reflects renewed confidence in the companys ability to continue delivering top safety and operational performance.Additionally, it enhances the sustainability of its business locally.He added that the contract extension comes at a time when the offshore jack-up rig market is experiencing a severe shortage in supply.It will add significant business value to the group, further boosting its future growth.Moreover, it will increase visibility into the future backlog of work, aligning with ADES strategy.