08:55 AM EDT, 06/26/2024 (MT Newswires) -- Enerflex Ltd. ( EFXT ) , which edged up on the TSX yesterday despite losses for the broader market, announced Wednesday the extension and consolidation of its credit facilities and outlined a new target leverage framework.

A statement noted that Enerflex ( EFXT ) has entered into an agreement to extend the maturity date of its secured revolving credit facility by one year to October 13, 2026. Availability under the RCF has been increased to US$800 million from $700 million. Enerflex ( EFXT ) has received renewed lending commitments from all current syndicate members and has also introduced HSBC Bank USA, N.A. as a lender.

In conjunction with the extension, Enerflex ( EFXT ) said it will be repaying all outstanding amounts under its secured term loan using cash on hand and availability under the expanded RCF. As at March 31, 2024, the TLA had drawings of $120 million.

The company also continues to maintain a $70 million unsecured credit facility with one of the lenders in its RCF syndicate. The LC Facility is supported by performance security guarantees provided by Export Development Canada. As at March 31, 2024, the company had utilized $36 million of the $70 million LC Facility limit.

Also, Enerflex ( EFXT ) is introducing a new leverage framework, targeting a bank-adjusted net debt-to-EBITDA ratio of 1.5x to 2.0x. It said: "The new leverage framework is underpinned by the highly utilized U.S. contract compression fleet, contracted international Energy Infrastructure product line and the recurring nature of our After-market Services business. Enerflex's ( EFXT ) Energy Infrastructure product line is supported by customer contracts, which are expected to generate approximately $1.6 billion of revenue during their current remaining terms."

Once the company is operating within its target leverage range, Enerflex ( EFXT ) expects to re-evaluate capital allocation priorities, which could include increased dividends, share repurchases, additional growth capital spending, and/or further repayment of debt. Allocation decisions will be based on providing the most attractive shareholder returns and measured against Enerflex's ( EFXT ) ability to maintain balance sheet strength, it added.

Preet Dhindsa, Enerflex's ( EFXT ) Senior Vice President and Chief Financial Officer, said: "From a financial flexibility perspective, we remain well positioned, with our bank-adjusted net debt-to-EBITDA leverage ratio exiting Q1/24 at 2.2x and the extension and expansion of the RCF providing ample liquidity to support our global business. We are pleased to introduce a new target leverage framework and believe it provides a visible path for the company to increase shareholder returns over time. In 2024, Enerflex ( EFXT ) will continue to focus on generating free cash flow, repaying debt, and lowering finance costs."

Enerflex ( EFXT ) plans to release its financial results and operating highlights for the three and six months ended June 30, 2024, after markets close on Wednesday, August 7, 2024.