Weir Group will pay more for its debt after extending nearly £970 million of banking facilities in the midst of the oil & gas crisis.
The Glasgow-headquartered global engineering group confirmed today it has agreed a maturity of June 2023 on a $950 million (£766m) revolving credit facility, with the option to extend by two years.
It has also signed up for a £200 million term loan is March 2022. Both loans, with a syndicate of 12 banks, were due to expire by September 2021.
The firm put its oil & gas business up for sale in January after booking a £546 million impairment charge following a fall in US fracking activity. Oil prices have since plunged due to coronavirus.
Weir Group said today: "The margin on the new facilities is slightly higher than current levels reflecting market conditions but remains highly competitive and significantly lower than the Group's existing long-term bonds."
In a Q2 trading update, Weir said its mining business had been resilient, boosted by an increase in orders from gold miners. It said its ESCO business had suffered from a decline in ore extraction North America and that oil & gas had experienced a "significant step-down in North American activity levels in Q2".
Weir said it would not give guidance on revenue and profits for the full year until the outlook was clearer.
