Paratus Energy Services Ltd. (“Paratus” or the “Company”) announces that its wholly owned subsidiary Fontis Holdings Ltd. (together with its subsidiaries, “Fontis”) has entered into an agreement with a leading international bank that will facilitate payment to Fontis of approximately $209 million1 of outstanding overdue invoices with its client in Mexico ( the "Receivables Payment"), whereby Fontis will receive the funds from its client before the end of this month. The Receivables Payment is subject to an undisclosed upfront fee that is well below 10% of the gross amount. Confidentiality provisions requested by the counterparty prevent further disclosure of the fee details.
“As previously announced, the Company has been actively exploring opportunities to potentially monetize part of its receivables balance, and following careful consideration and consultation with several counterparties, Paratus has concluded that this agreement presented an attractive opportunity”, said Robert Jensen, CEO of Paratus. “The Company will continue to opportunistically evaluate its alternatives to optimize its receivables balance in the future.”
Following receipt of the Receivables Payment, Fontis’ pro forma receivable balance with the customer stands at approximately $140 million as of December 31, 20242. The Company also notes that in late December 2024, Fontis received a minor payment from its client.
As of December 31, 2024, Paratus Group’s cash balance stood at approximately $98 million3. The Receivables Payment will significantly strengthen the cash position of the Company, in addition to Fontis still having approximately $140 million of receivables with its client in Mexico. The Company will continue to take a disciplined approach to capital allocation and may use net proceeds from the Receivables Payment to support operations, optimize the capital structure, and fund shareholder distributions and/or share buybacks.
Paratus previously distributed $0.22 per share to its shareholders in connection with both its second and its third quarter 2024 interim results. The Company reiterates its commitment to a policy of providing shareholders with stable, long-term, and sustainable distributions, subject to allowance under its debt agreements.