“Loadmaster Industries is a diversified manufacturing, engineering, design, and field services company with 30 years of experience in the global energy and industrial markets. Our Mission is to provide valuable turnkey solutions for our clients in a culture where employees and shareholders goals are achieved with a focus on Quality, Health, Safety, and the Environment. Loadmaster’s broad experience and high quality products made us one of the most compatible providers of drilling structures, equipment, and services. In the last several years, our company was involved in numerous projects related to land rigs, large scale substructures, and complex offshore drilling vessels and platforms. Nowadays, together with alliance partners, Loadmaster offers complete drilling packages for the modern upstream petroleum market”. From the LinkedIn Profile.
BDC Credit Reporter View
Loadmaster Derrick is a well-regarded oil derrick repair service company. However, the Company is privately-held by Wynnchurch Capital, so financial information is not readily available. We know the Company was acquired in 2012, at least partly financed with senior debt from the only BDC involved, THL Credit or TCRD. The initial debt was in the amount of $13mn, with a 2017 maturity. The Company was Performing till (not surprisingly in hindsight) the IVQ of 2014 when the loan was first marked at a small discount, according to Advantage Data records. The write-down increased in the IQ of 2016 to 25%, before going on Non-Accrual in the IIQ of 2016 and being written down by 35%. As we wrote in an Alert, in July the Company was restructured with “TCRD exchanging the cost basis of its senior secured loans totaling $14.7 million for a new senior secured first lien term loan of $7.0 million and an income producing debt-like preferred equity position, valued at $1.1 million.
..THL Credit recognized a $6.6 million loss on conversion to preferred equity. Additionally, it made a $1.5 million investment in a first lien senior secured term loan as part of the restructuring.” In the IIQ of 2016 TCRD’s new facilities were marked close to this adjusted par. TCRD provided no update regarding the performance of the restructured company. We do not know how much of the ownership TCRD has received in the transmutation. The BDC Credit Reporter rates the Company a 4, given the uncertainties and the industry in which it is involved. We note the old loan bears interest at an 11.3% rate, payable in cash. The new Term Loan is paid only in PIK form, at 13%. Now both facilities mature in 2020. Changing capital structures does not guarantee financial success. The Credit Trend is up from the IIIQ to the IIQ but only due to the restructuring, but we have no view on the latest status. Total exposure is down to $9mn, but that’s due to the $6.6mn Realized Loss already incurred.