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March 18 (Reuters) - Pacific Rubiales Energy Corp, the largest private oil producer in Colombia, said it would suspended paying dividends and that lenders had agreed to relax their terms, helping the company shore up funds to weather the slump in oil prices.
The Canada-based company, which cut its capital spending plans in January, said it would save about $52 million per quarter by suspending its quarterly dividend of 16.5 cents per share from the current quarter.
The company also said it had fully draw on its credit facility to pay off short-term bank debt for 2015 and 2016, pushing out the next payment to late 2016, and that it plans to hold the remaining funds of more than $500 million as a buffer against “a possible worsening oil price environment”.
Pacific Rubiales said in December it did not expect to tap into its $1.0 billion revolving credit facility in 2015.
The company said on Wednesday that lenders had agreed to relax terms to allow the company’s debt to be 4.5 times its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
That is lower than the existing terms which required Pacific Rubiales’s debt to stay below 3.5 times adjusted EBITDA.
After rising for three quarters, the company’s adjusted EBITDA fell 36 percent year-over-year to $419.3 million in the fourth-quarter ended December.
A few days back Colombia’s state-run Ecopetrol said it would not renew a contract in mid-2016 under which Pacific Rubiales operates the Rubiales oil field, which accounts for nearly half the Canadian company’s total production.
Pacific Rubiales’s shares closed at C$2.65 Tuesday on the Toronto Stock Exchange. (Reporting By Shubhankar Chakravorty and Ashutosh Pandey in Bengaluru; Editing by Savio D‘Souza)