A press release today announced that Invico Diversified Income Fund ("IDIF") had extended a senior secured loan of up to US$8.5 million to Southern Energy Corporation, an oil and natural gas exploration and production company. The three-year debt facility places IDIF as a first-position lender. It offers a 12% interest rate, customary commitment and work fees, and issuance of purchase warrants following an initial advance of up to US$5.5 million.
The debt restructuring will decrease the first-lien debt position from $12.7 million to US$5.5 million and significantly reduce financing costs. The deal is expected to close before April 30, 2021.
“After tremendous growth across the firm over the past several years, Invico has a renewed commitment as a capital provider to talented Canadian energy teams managing assets in Canada and the U.S.,” said Jason Brooks, President of Invico Capital. “The Southern Energy team provides a unique opportunity for us. We are in a period where Invico’s customized lending structures and investment in non-operated assets can benefit a sector lacking capital formation despite having compelling returns available.”