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Recovery Energy, Inc. (NASDAQ:RECV) made modifications to their debt.
Recovery Energy, Inc. (NASDAQ:RECV) made modifications to their debt.
As quoted in the press release:
On April 15, 2013, the Company amended both its secured term loans with Hexagon, LLC (“Hexagon”), and its 8% Senior Secured Convertible Debentures to extend their maturity dates to May 16, 2014. In consideration for the extended maturity date of both loans and the reduced interest rate and minimum loan payment under the secured term loans, the Company is required to provide both Hexagon and the holders of the debentures an additional security interest in 15,000 acres (or 30,000 acres in aggregate) of our undeveloped acreage. Additionally, pursuant to the amendment to the secured term loan, Hexagon agreed to (i) reduce the interest rate on the term loans from 15% to 10% beginning retroactively with March 2013, (ii) permit the Company to make interest-only payments for March, April, May, and June, after which time the minimum secured term loan payment will be no greater than $230,000 per month.
Recovery’s President and CFO, Bradley Gabbard , said:
This additional financing will enable us to expand our drilling program, and will provide us with significantly more flexibility in meeting our working capital needs.