HOUSTON, March 28, 2016 /PRNewswire/ -- ION
Geophysical Corporation (the "Company") (NYSE: IO) today announced
the commencement of an exchange offer (the "Exchange Offer")
related to the Company's outstanding 8.125% Senior Secured Second
Priority Notes due 2018 (the "Existing Notes"). The Company is
offering to exchange any and all of the Existing Notes held by
eligible holders. The Exchange Offer and Consent Solicitation are
part of a transaction regarding the Company's entry into a support
agreement (the "Support Agreement") with holders of its Existing
Notes that collectively hold more than two-thirds of the aggregate
outstanding principal amount of the Existing Notes (the "Supporting
Noteholders").
Under the terms of the Exchange Offer, for each $1,000 principal amount of Existing Notes validly
tendered for exchange and not validly withdrawn by an eligible
holder (an "Exchange Participant") prior to the Expiration Date (as
defined below), and accepted for exchange by the Company, the
Company will pay on the Settlement Date (as defined below) the
consideration (the "Exchange Consideration") of (i) $1,000 principal amount of the Company's new
9.125% Senior Secured Second Priority Notes due 2021 (the "New
Notes") plus (ii) either (a) for Existing Notes tendered at or
prior to 11:59 P.M., New York City
Time, on the Early Tender Date (as defined below), ten (10) shares
of the Company's common stock (the "Early Stock Consideration"),
and (b) for Existing Notes tendered after the Early Tender Date,
seven (7) shares of the Company's common stock (the "Stock
Consideration") (such shares issued as the Early Stock
Consideration or the Stock Consideration, together with the New
Notes, the "New Securities"), upon the terms and subject to the
conditions set forth in the Company's confidential Offer to
Exchange and related Letter of Transmittal, each dated March 28, 2016 (the "Offer Documents").
In connection with the Exchange Offer, the Company is also
offering to utilize up to $15.0
million of cash to purchase Existing Notes of an Exchange
Participant that elects to tender such Existing Notes (as further
described below) for cash at substantial discount to par to reduce
the aggregate amount of the Existing Notes. In addition,
concurrently with the Exchange Offer, the Company is soliciting
consents (the "Consent Solicitation") from eligible holders to
proposed amendments to the indenture governing the Existing Notes
(the "Proposed Amendments"). The Proposed Amendments would, among
other things, provide for the release of the second priority
security interest in the collateral securing the Existing Notes and
the grant of a third priority security interest in the collateral,
subordinate to liens securing all senior and second priority
indebtedness of the Company, including the Company's revolving
credit facility and the New Notes, and eliminate substantially all
of the restrictive covenants and certain events of default
pertaining to the Existing Notes. No consideration is being
paid to holders of Existing Notes in connection with the Consent
Solicitation. The aggregate principal amount of the Existing Notes
outstanding as of March 28, 2016 is
$175 million.
Pursuant to the Support Agreement in respect of the Exchange
Offer, each Supporting Noteholder party thereto has agreed, in
accordance with and subject to the terms of the Support Agreement
to, among other things, tender all of its holdings of Existing
Notes in the Exchange Offer and vote all of its holdings of
Existing Notes in favor of the Proposed Amendments. The
Supporting Noteholders are eligible to participate in the Cash
Tender Option (defined below) if they elect to do so. In
connection with the commencement of the Exchange Offer, the Support
Agreement was amended to contemplate revisions to the terms and
conditions of the Exchange Offer to (i) provide for the release of
the second priority security interest in the collateral securing
the Existing Notes and the grant of a third priority security
interest in the collateral, subordinate to liens securing all
senior and second priority indebtedness of the Company, including
the Company's credit facility and the New Notes, rather than the
elimination of the security interest in the collateral securing the
Existing Notes, (ii) reduce the number of shares of the Company's
common stock issuable in exchange for each $1,000 principal amount of Existing Notes from
ten (10) shares to seven (7) shares, (iii) provide for an early
tender payment of an additional three (3) shares of the Company's
common stock for each $1,000
principal amount of Existing Notes validly exchanged prior to the
Early Tender Date and (iv) provide a one business day extension of
the time periods to commence and close the Exchange Offer.
As part of the Exchange Offer, each Exchange Participant may
tender all or a portion of its Existing Notes for a cash payment in
lieu of the Exchange Consideration upon the terms and subject to
the conditions set forth in the Offer Documents (the "Cash Tender
Option"). The aggregate amount of cash consideration to be paid by
the Company for tendered Existing Notes accepted for purchase
pursuant to the Cash Tender Option is $15.0
million plus accrued and unpaid interest to, but not
including, the Settlement Date (the "Cash Tender Cap"). The cash
prices for the Cash Tender Option will be determined pursuant to an
unmodified "Dutch auction" process by which Exchange Participants
electing to participate in the Cash Tender Option submit a bid that
identifies the principal amount of Existing Notes and the price
(not less than $430 and not more than
$600 per $1,000 principal amount of Existing Notes) at
which such Exchange Participant is willing to tender all or a
portion of the tendered Existing Notes to the Company (a "Bid
Price"). The Company will accept for purchase tendered Existing
Notes at the lowest Bid Prices until the Cash Tender Cap is
reached, subject to proration.
Eligible holders of Existing Notes accepted for exchange will
also receive a cash payment equal to the accrued and unpaid
interest in respect of such Existing Notes from the applicable most
recent interest payment date to, but not including, the Settlement
Date. Interest on the New Notes will accrue from the
Settlement Date.
In order to participate in the Exchange Offer, a holder of
Existing Notes must tender all of its Existing Notes in the
Exchange Offer.
The Exchange Offer, including the Cash Tender Option, will
expire at 11:59 p.m., New York City time, on April 25, 2016, unless extended by the Company
(the "Expiration Date"). In order to be eligible to receive
the Early Stock Consideration, Exchange Participants must tender
their Existing Notes on or prior to 11:59
P.M. New York City Time, on April 11,
2016 (such time and date, as it may be extended, the "Early
Tender Date"), unless such deadline is extended by the Company.
Tenders of Existing Notes pursuant to the Exchange Offer may be
validly withdrawn, and the related consents delivered pursuant to
the Consent Solicitation may be validly revoked at any time prior
to the Expiration Date but not thereafter. Participants in the Cash
Tender Option may withdraw or modify their Bid Price at any time
prior to the Expiration Date, in which case they still will be
deemed to be Exchange Participants, and their tender of Existing
Notes still will be deemed to include their consent to the Proposed
Amendments unless such withdrawal specifically states that they are
also withdrawing the tendered Existing Notes from the Exchange
Offer. A valid withdrawal of tendered Existing Notes prior to the
Expiration Date will be deemed a valid revocation of the related
consent, and the holder of such Existing Notes will not be entitled
to receive the Exchange Consideration or cash payment under the
Cash Tender Option, as applicable.
The Exchange Offer and the Consent Solicitation are subject to
the satisfaction or waiver of a number of conditions set forth in
the Offer Documents. These conditions include, among others, the
requirement that (i) at least 90% in principal amount of the
Existing Notes are properly tendered by the expiration of the
Exchange Offer, (ii) the Company has received the requisite
consents in connection with the consent solicitation to adopt the
Proposed Amendments, and (iii) the Company has entered into an
amendment to its revolving credit facility in connection with the
issuance of the New Notes. Subject to the terms of the Support
Agreement, no additional consents are needed to be validly
delivered in the Consent Solicitation in order to obtain the
requisite consents to adopt the Proposed Amendments.
Subject to applicable law and the terms of the Support
Agreement, the Company may terminate or withdraw the Exchange Offer
and the Consent Solicitation if any of the applicable conditions
are not satisfied or waived by the Expiration Date.
Only holders of the Existing Notes who have completed and
returned the eligibility form confirming that they are (i) persons
in the United States and
"qualified institutional buyers" within the meaning of Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act"), (ii) in the United States
and "accredited investors" within the meaning of Rule 501(a) of
Regulation D of the Securities Act or (iii) not "U.S. persons" and
are outside of the United States
within the meaning of Regulation S under the Securities Act are
authorized to receive and review the Offer Documents. Holders
who desire to obtain and complete an eligibility form should
contact the information agent, D.F.
King & Co., Inc., toll-free at (866) 620-8437 or (212)
269-5550 (for banks and brokers), or via the following
website:www.dfking.com/io, or the dealer manager, Oppenheimer &
Co. Inc., toll-free at (800) 221-5588 or collect at (212)
667-8104.
Eligible holders are urged to carefully read the Offer Documents
before making any decision with respect to the Exchange
Offer. None of the Company, the dealer manager, the
information agent and the exchange agent makes any recommendation
as to whether eligible holders should tender or refrain from
tendering their Existing Notes. Eligible holders must make
their own decision as to whether to tender Existing Notes.
The New Securities offered by the Company have not been
registered under the Securities Act, or any state securities laws
and, unless so registered, may not be offered or sold in
the United States except pursuant
to an applicable exemption from the registration requirements of
the Securities Act and applicable state securities laws. The
Exchange Offer is not being made to holders of Existing Notes in
any jurisdiction in which the making or acceptance thereof would
not be in compliance with the securities, blue sky or other laws of
such jurisdiction. This press release does not constitute an
offer to purchase securities or a solicitation of an offer to sell
any securities or an offer to sell or the solicitation of an offer
to purchase any securities, nor does it constitute an offer or
solicitation in any jurisdiction in which such offer or
solicitation is unlawful.
About ION
ION is a leading provider of technology-driven solutions to the
global oil & gas industry. ION's offerings are designed
to help companies reduce risk and optimize assets throughout the
E&P lifecycle. For more information, visit iongeo.com.
Contact
Jamey S. Seely
Executive Vice President, General Counsel and Corporate
Secretary
+1.281.552.3011
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of
the Securities and Exchange Act of 1934, as amended.
Forward-looking statements are based on current beliefs and
expectations and involve certain assumptions or estimates that
involve various risks and uncertainties, such as risks relating to
the satisfaction of the conditions precedent to completing the
Exchange Offer and the Company's ability to consummate the Exchange
Offer for any of the Existing Notes and other risks discussed in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2015, quarterly reports
on Form 10-Q and other subsequent filings with the Securities and
Exchange Commission. Readers should not place undue reliance
on any such forward-looking statements, which are made only as of
the date hereof. The Company has no duty, and assumes no
obligation, to update forward-looking statements as a result of new
information, future events or changes in the Company's
expectations.
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SOURCE ION Geophysical Corporation