Enerflex Ltd. Announces Extension and Consolidation of Credit Facilities, New Target Leverage Framework and Timing of Second Quarter Results

Core Points - Enerflex Ltd. has extended the maturity of its secured revolving credit facility to October 13, 2026, and increased its availability to $800 million from $700 million, providing ample liquidity to support its global business [2][10][13] - The company is introducing a new target leverage framework, aiming for a bank-adjusted net debt-to-EBITDA ratio of 1.5x to 2.0x, which is supported by its U.S. contract compression fleet and international Energy Infrastructure product line [21][22] - Enerflex plans to repay its existing term loan of $120 million using cash on hand and the expanded revolving credit facility, reflecting ongoing efforts to reduce finance costs and optimize its debt structure [20][22] Financial Strategy - The company maintains a $70 million unsecured credit facility, with $36 million utilized as of March 31, 2024, supported by performance security guarantees from Export Development Canada [11] - Once operating within its target leverage range, Enerflex expects to re-evaluate capital allocation priorities, which may include increased dividends, share repurchases, and additional growth capital spending [12][21] - The Energy Infrastructure product line is projected to generate approximately $1.6 billion in revenue during its current remaining terms, underpinning the new leverage framework [21] Management Insights - Senior management expressed satisfaction with the extension and expansion of the revolving credit facility, highlighting the importance of financial flexibility and the path to increasing shareholder returns over time [13][22] - The company is focused on generating free cash flow, repaying debt, and lowering finance costs in 2024 [13]