ADES Holding Secures $3 Billion Credit Facility for Its Operations

ADES Holding Company, a world leading international oil and gas drilling services provider based in Saudi Arabia, has announced that it has amended its existing syndicated facility, securing an additional $3 billion, with the majority of existing lenders participating along with new, leading local and regional financial institutions.

The new $3 billion upsized financing is predominantly intended as a standby facility for the Group’s ambitious expansion plans, divided into the equivalent of a $2.7 billion standby term tranche and additional $300 million Revolving Credit Facility (RCF) tranche.

The new and existing lenders of ADES Holding include Saudi Awwal Bank, Riyad Bank, Al Rajhi Banking and Investment Corporation, Arab National Bank, Saudi National Bank, Alinma Bank, Banque Saudi Fransi, Aljazira Bank, Arab Petroleum Investments Corporation and Commercial Bank of Dubai.

The significantly upsized syndication will provide ADES with the financial flexibility to capitalize on new potential growth opportunities, including acquisitions and organic growth, the company said in a disclosure to Saudi main Exchange Tadawul on Sunday.

The additional commitments will be available in both US dollar and Saudi Arabian riyals (38.5% in USD and 61.5% in SAR). Utilisation under the standby term tranche will be subject to completion of certain conditions and will be secured by the potential assets to be newly acquired along with their associated backlog.

The tenor of the loan standby term tranche is for 8.5 years with a final maturity in December 2032, including a 12-month grace period while the RCF tranche: 8 years with a final maturity in June 2032, the company said.

Repayment Schedule

The amount to be utilised under the standby term tranche shall be repaid on a semi-annual basis and includes a bullet repayment of 31.5% at the final maturity date.

ADES Holding CEO Dr Mohamed Farouk said that they were pleased to have secured this substantial funding with commitments from both existing and new lenders, which underscored the strong confidence his company’s lenders have in their business model, strategic vision and the oil & gas industry.

He further said that this additional capital will further strengthen ADES Holding’s purchasing power, providing it with greater flexibility to consider and act swiftly on value-accretive acquisitions and other growth opportunities, all while maintaining sustainable leverage levels.

“I am also pleased to highlight the competitive pricing of the new facility, further strengthening ADES’ robust financial health. We remain committed to delivering long-term sustainable value to our stakeholders while continuing to expand our global footprint and leadership in the oil and gas drilling industry,” he added.

Operations in Nine Countries

ADES Holding Company, with its headquarters in Al Khobar in Saudi Arabia, is a world-leading international drilling services provider. The company has a fleet of 87 rigs across nine countries, including 38 onshore drilling rigs, 46 jack-up offshore drilling rigs, two jack-up barges, and one mobile offshore production unit.

The company’s net income more than doubled y-o-y to $53.54 million in the first three months of 1Q 2024 while its revenues rose 60.5% y-o-y to $400 million over the same period. It attributed the growth in its top line to booking more business in the Kingdom, fuelled by the deployment of 19 rigs as part of a large tender.