MRC Global Simplifies Capital Structure by Securing New $350 Million Term Loan B and Repurchasing Convertible Preferred Stock
MRC Global has secured a new $350 million Senior Secured Term Loan B maturing in 2031. The company used the loan proceeds, along with borrowings from its asset-based lending facility, to repurchase all 363,000 shares of its 6.50% Series A Convertible Perpetual Preferred Stock for $361 million plus accrued dividends from Mario Investments The company expects this transaction to be accretive to both cash generation and earnings per share in 2025 and beyond, while simplifying its capital structure and eliminating potential equity dilution. MRC Global's asset-based lending facility amendment, extending maturity to 2029, is expected to be finalized in November 2024.
MRC Global ha ottenuto un nuovo prestito garantito Senior Secured Term Loan B di 350 milioni di dollari, in scadenza nel 2031. L'azienda ha utilizzato il ricavato del prestito, insieme ai prestiti dalla sua linea di credito basata sugli asset, per riacquistare tutte le 363.000 azioni delle sue azioni privilegiate convertibili perpetue di Serie A al 6,50% per 361 milioni di dollari più i dividendi maturati da Mario Investments. L'azienda si aspetta che questa operazione contribuisca sia alla generazione di cassa che agli utili per azione nel 2025 e oltre, semplificando la propria struttura patrimoniale ed eliminando potenziali diluizioni azionarie. La modifica della linea di credito basata sugli asset di MRC Global, che estende la scadenza al 2029, dovrebbe essere finalizzata nel novembre 2024.
MRC Global ha asegurado un nuevo préstamo garantizado Senior Secured Term Loan B de 350 millones de dólares con vencimiento en 2031. La compañía utilizó los fondos del préstamo, junto con préstamos de su línea de crédito basada en activos, para recomprar todas las 363,000 acciones de su acción preferente convertible perpetua de la Serie A al 6.50% por 361 millones de dólares más dividendos acumulados de Mario Investments. La compañía espera que esta transacción sea beneficiosa tanto para la generación de efectivo como para las ganancias por acción en 2025 y más allá, al tiempo que simplifica su estructura de capital y elimina la posible dilución de capital. Se espera que la enmienda a la línea de crédito basada en activos de MRC Global, que extiende su vencimiento hasta 2029, se finalice en noviembre de 2024.
MRC Global는 2031년 만료되는 3억 5천만 달러 규모의 신규 보장된 고위험 차입 B 대출을 확보했습니다. 회사는 자산 기반 대출 시설에서의 대출금과 함께 대출 금액을 사용하여 Mario Investments로부터 6.50% 시리즈 A 전환 영구 우선주 363,000주를 3억 6,100만 달러와 발생한 배당금으로 재매입했습니다. 이 거래가 2025년 이후의 현금 창출 및 주당 순이익에 긍정적인 영향을 미치면서 자본 구조를 단순화하고 잠재적인 주식 희석을 없앨 것으로 기대하고 있습니다. MRC Global의 자산 기반 대출 시설 개정안은 2029년까지 만료를 연장하며, 2024년 11월에 최종 확정될 예정입니다.
MRC Global a sécurisé un nouveau prêt à terme senior garanti de 350 millions de dollars, arrivant à maturité en 2031. La société a utilisé le produit du prêt, ainsi que les emprunts de sa ligne de crédit basée sur les actifs, pour racheter toutes les 363 000 actions de ses actions privilégiées convertibles perpétuelles de série A à 6,50 % pour 361 millions de dollars, plus les dividendes accumulés de Mario Investments. L'entreprise s'attend à ce que cette transaction contribue à la génération de liquidités et aux bénéfices par action en 2025 et au-delà, tout en simplifiant sa structure financière et en éliminant une dilution potentielle des actions. L'amendement à la ligne de crédit basée sur les actifs de MRC Global, prolongeant l'échéance jusqu'en 2029, devrait être finalisé en novembre 2024.
MRC Global hat ein neues, 350 Millionen Dollar umfassendes Senior Secured Term Loan B gesichert, das im Jahr 2031 fällig wird. Das Unternehmen hat die Kreditmittel zusammen mit der Inanspruchnahme seiner asset-basierten Kreditfazilität verwendet, um alle 363.000 Aktien seiner 6,50% Series A Convertible Perpetual Preferred Stock für 361 Millionen Dollar zuzüglich aufgelaufener Dividenden von Mario Investments zurückzukaufen. Das Unternehmen erwartet, dass diese Transaktion sich sowohl positiv auf die Cash-Generierung als auch auf das Ergebnis je Aktie im Jahr 2025 und darüber hinaus auswirken wird, während sie die Kapitalstruktur vereinfacht und mögliche Equity-Dilution beseitigt. Die Änderung der asset-basierten Kreditfazilität von MRC Global, die die Fälligkeit auf 2029 verlängert, soll im November 2024 abgeschlossen werden.
- Secured new $350 million Term Loan B with extended maturity until 2031
- Expected accretion to cash generation and EPS from 2025
- Elimination of potential equity dilution risk
- Simplification of capital structure
- Increased debt load with new $350 million Term Loan
- Cash outflow of $361 million plus dividends for preferred stock repurchase
Insights
This capital restructuring marks a significant strategic move that strengthens MRC Global's financial position. The new
The removal of the convertible preferred stock prevents future dilution of common shareholders and simplifies the capital structure. The expected accretion to both cash flow and EPS in 2025 should positively impact shareholder value. The pending ABL facility extension to 2029 further reinforces the company's long-term financial flexibility. This comprehensive refinancing demonstrates proactive balance sheet management and should reduce overall cost of capital.
HOUSTON, Oct. 29, 2024 (GLOBE NEWSWIRE) -- MRC Global Inc. (NYSE: MRC), announced today that it has secured a new
The proceeds from this loan, and borrowings from the asset-based lending facility were used to repurchase all 363,000 shares of its
Rob Saltiel, MRC Global President & CEO stated, “We took advantage of favorable credit market conditions to issue a new term loan, allowing us to repurchase our preferred stock. We expect this repurchase to be accretive to both cash generation and earnings per share in 2025 and beyond. Additionally, these transactions simplify our capital structure and eliminate potential equity dilution through the conversion of the preferred shares into common stock.”
The previously announced proposed amendment of the company’s asset-based lending facility extending the maturity date to 2029, remains on track and is expected to be finalized in November 2024.
About MRC Global Inc.
Headquartered in Houston, Texas, MRC Global (NYSE: MRC) is the leading global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, and production and transmission sectors. With over 100 years of experience, MRC Global has provided customers with innovative supply chain solutions, technical product expertise and a robust digital platform from a worldwide network of 219 locations including valve and engineering centers. The company’s unmatched quality assurance program offers over 300,000 SKUs from over 8,500 suppliers, simplifying the supply chain for approximately 10,000 customers. Find out more at www.mrcglobal.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “will,” “expect,” “expected,” and similar expressions are intended to identify forward-looking statements.
Statements about the company’s business, including the company’s expectations that the transactions described in this release as being accretive to both cash generation and earnings per share in 2025 and beyond, are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, most of which are difficult to predict and many of which are beyond MRC Global’s control, including the factors described in the company’s SEC filings that may cause the company’s actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements.
These risks and uncertainties include (among others) decreases in capital and other expenditure levels in the industries that the company serves; U.S. and international general economic conditions; geopolitical events; decreases in oil and natural gas prices; unexpected supply shortages; loss of third-party transportation providers; cost increases by the company’s suppliers and transportation providers; increases in steel prices, which the company may be unable to pass along to its customers which could significantly lower the company’s profit; the company’s lack of long-term contracts with most of its suppliers; suppliers’ price reductions of products that the company sells, which could cause the value of its inventory to decline; decreases in steel prices, which could significantly lower the company’s profit; a decline in demand for certain of the products the company distributes if tariffs and duties on these products are imposed or lifted; holding more inventory than can be sold in a commercial time frame; significant substitution of renewables and low-carbon fuels for oil and gas, impacting demand for the company’s products; risks related to adverse weather events or natural disasters; environmental, health and safety laws and regulations and the interpretation or implementation thereof; changes in the company’s customer and product mix; the risk that manufacturers of the products that the company distributes will sell a substantial amount of goods directly to end users in the industry sectors that the company serves; failure to operate the company’s business in an efficient or optimized manner; the company’s ability to compete successfully with other companies; the company’s lack of long-term contracts with many of its customers and the company’s lack of contracts with customers that require minimum purchase volumes; inability to attract and retain employees or the potential loss of key personnel; adverse health events, such as a pandemic; interruption in the proper functioning of the company’s information systems; the occurrence of cybersecurity incidents; risks related to the company’s customers’ creditworthiness; the success of acquisition strategies; the potential adverse effects associated with integrating acquisitions and whether these acquisitions will yield their intended benefits; impairment of the company’s goodwill or other intangible assets; adverse changes in political or economic conditions in the countries in which the company operates; the company’s significant indebtedness; the dependence on the company’s subsidiaries for cash to meet parent company obligations; changes in the company’s credit profile; potential inability to obtain necessary capital; the sufficiency of the company’s insurance policies to cover losses, including liabilities arising from litigation; product liability claims against the company; pending or future asbestos-related claims against the company; exposure to U.S. and international laws and regulations, regulating corruption, limiting imports or exports or imposing economic sanctions; risks relating to ongoing evaluations of internal controls required by Section 404 of the Sarbanes-Oxley Act; risks related to changing laws and regulations including trade policies and tariffs; and the potential share price volatility and costs incurred in response to any shareholder activism campaigns.
For a discussion of key risk factors, please see the risk factors disclosed in the company’s SEC filings, which are available on the SEC’s website at www.sec.gov and on the company’s website, www.mrcglobal.com. MRC Global’s filings and other important information are also available on the Investors page of the company’s website at www.mrcglobal.com.
Undue reliance should not be placed on the company’s forward-looking statements. Although forward-looking statements reflect the company’s good faith beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the company’s actual results, performance or achievements or future events to differ materially from anticipated future results, performance or achievements or future events expressed or implied by such forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent required by law.
Contact:
Monica Broughton
VP, Investor Relations & Treasury
MRC Global Inc.
Monica.Broughton@mrcglobal.com
832-308-2847
FAQ
What is the size and maturity of MRC Global's new Term Loan B?
How much did MRC Global pay to repurchase its preferred stock?
When will MRC Global's asset-based lending facility amendment be finalized?
What are the expected benefits of MRC's preferred stock repurchase?
