#Bermuda #Hamilton #Paratus Energy #Fontis Holdings #Mexico Receivables

Paratus Energy Services Makes Strategic Move in Mexico

Paratus Energy Services Ltd. (ticker: PLSV), based in Oslo, has taken a significant step to strengthen its financial position by announcing an agreement involving its wholly owned subsidiary, Fontis Holdings Ltd. This decision will allow the company to receive approximately $209 million in overdue invoice payments from its client in Mexico. The payment is expected to be completed by the end of this month, providing an important boost to Fontis's operational cash flow.

Details of the Receivables Payment Agreement

The agreement, reached with a prominent international bank, allows Fontis to access the funds ahead of the initial due dates. It's relevant to mention that the agreement is coupled with an undisclosed upfront fee, though it is stated to be below 10% of the total amount due. The secrecy surrounding the terms is a standard practice to maintain confidentiality, as requested by the bank involved.

Robert Jensen, the CEO of Paratus, commented on the development, emphasizing the company's ongoing efforts over the past months to find avenues to monetize certain receivables. Jensen reiterated that this particular agreement aligns well with their strategy and presents an attractive opportunity in the current economic climate.

After securing the Receivables Payment, Fontis's adjusted accounts receivable with the Mexican client will stand at around $140 million. This follows a minor payment that Fontis also received in late December 2024. Such movements indicate a gradual improvement in cash flow management for the company, a crucial factor as it looks to bolster its financial stability.

Financial Outlook and Strategic Implications

As of the end of December 2024, Paratus Group reported a cash balance of approximately $98 million. The forthcoming Receivables Payment is expected to enhance this cash position significantly. Alongside this, with $140 million still outstanding from its Mexican client, Paratus is poised for a more robust financial standing.

Going forward, Paratus will adopt a disciplined approach towards capital allocation. The proceeds from the Receivables Payment may be utilized to optimize operational capabilities, strengthen the capital structure, and potentially distribute funds to shareholders through dividends or share buybacks.

The company has established a pattern of sharing profits with its shareholders, having previously issued $0.22 per share during its second and third quarter results in 2024. Paratus is committed to ensuring stable and sustainable distributions to its shareholders, always considering the obligations under its debt agreements.

About Paratus Energy Services

Paratus Energy Services Ltd. operates as a holding entity for a collection of leading firms in the energy services sector. Its primary assets include ownership stakes in Fontis Energy— a prominent offshore drilling company operating multiple high-specification jack-up rigs in Mexico— and a fifty-fifty joint venture with Seagems, known for its subsea services in Brazil.

The recent agreement is a clear indication of Paratus's commitment to optimizing its operational cash flows and ensuring the ongoing success of its subsidiaries. The strategic nature of this move highlights the company's forward-thinking approach and readiness to adapt to market conditions for long-term growth.