HOUSTON, April 28, 2016 /PRNewswire/ -- ION
Geophysical Corporation (NYSE: IO) today announced the successful
completion of the previously announced exchange offer (the
"Exchange Offer") and consent solicitation (the "Consent
Solicitation") related to the Company's outstanding 8.125% Senior
Secured Second Priority Notes due 2018 (the "Existing Notes").
President and CEO Brian Hanson
commented, "We are very pleased with the success of the exchange
offer and the support we received from our bondholders. Almost 84%
of the outstanding Existing Notes were tendered and accepted by the
Company in the exchange. The exchange de-levered our balance sheet
by $25,934,000 million and extended
the maturity of $120,569,000 million
of our outstanding debt until the end of 2021, providing us with
additional flexibility and liquidity and putting us in a position
where we are better able to execute our strategic and operating
plans in 2016 and for years to come. This is a positive step
forward for ION, helping to align the business with the current
market environment and positioning the business for the
future."
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tendered for exchange and not validly withdrawn by an eligible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 11:59 P.M., New York City Time, on April 25, 2016, and accepted for exchange by the
Company, the Company offered 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 4:59
P.M., New York City Time, on Friday,
April 15, 2016 (the "Extended Early Tender Deadline"), ten
(10) shares of the Company's common stock (the "Early Stock
Consideration"), or (b) for Existing Notes tendered after the
Extended Early Tender Deadline, 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").
As part of the Exchange Offer, each Exchange Participant had the
opportunity to 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
that could be paid by the Company for tendered Existing Notes
accepted for purchase pursuant to the Cash Tender Option was
$15.0 million plus accrued and unpaid
interest to, but not including, the settlement date of the Exchange
Offer (collectively, the "Cash Tender Cap").
Concurrently with the Exchange Offer, the Company solicited
consents from Exchange Participants to proposed amendments to the
indenture governing the Existing Notes (the "Proposed Amendments").
The Proposed Amendments, 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 first 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, modify the covenants regarding mergers and consolidation
and eliminate certain events of default pertaining to the Existing
Notes.
The Exchange Offer, including the Cash Tender Option, and the
Consent Solicitation expired at 11:59
P.M., New York City time,
on April 25, 2016. In total,
the Company accepted for exchange $146,503,000 in aggregate principal amount of the
Existing Notes, or approximately 84% of the $175,000,000 outstanding aggregate principal
amount of the Existing Notes. The Existing Notes were validly
tendered and accepted by the Company in the exchange as
follows:
Option
|
Aggregate Amount
of
Existing Notes Tendered
and Accepted by the
Company
|
Approximate
Percentage
of Outstanding Existing
Notes
|
Early Tender Exchange
Consideration (New Notes and Early Stock Consideration)
|
$120,498,000
|
68.86%
|
Non-Early Tender
Exchange Consideration (New Notes and Stock
Consideration)
|
$71,000
|
0.04%
|
Cash Tender
Option
|
$25,934,000
|
14.82%
|
Total
|
$146,503,000
|
83.72%
|
Because the Company received the necessary consents to effect
the Proposed Amendments, any Existing Notes not validly tendered
pursuant to the Exchange Offer remain outstanding and the holders
are subject to the terms of the indenture governing the Existing
Notes as amended by the first supplemental indenture implementing
the Proposed Amendments. No consideration was paid to holders
of Existing Notes in connection with the Consent Solicitation.
After giving effect to the Exchange Offer and Consent Solicitation,
the aggregate principal amount of the Existing Notes remaining
outstanding is $28,497,000 as of
April 28, 2016, and such Existing
Notes are secured by a third priority security interest in the
collateral, subordinate to the liens securing all first and second
priority indebtedness of the Company, including under the Company's
revolving credit facility and New Notes.
In exchange for $120,569,000 in
aggregate principal amount of Existing Notes, the Company issued
$120,569,000 aggregate principal
amount of its New Notes and 1,205,477 shares of the Company's
common stock, including 1,204,980 shares issued as Early Stock
Consideration and 497 shares issued as Stock Consideration. Such
New Securities were issued by the Company in reliance on an
exemption from registration set forth in Section 4(a)(2) of the
Securities Act of 1933, as amended (the "Securities Act"). The
Company received no cash consideration in exchange for the issuance
of the New Securities.
The Company utilized 508,464 treasury shares towards the total
1,205,477 shares issued by the Company pursuant to the Exchange
Offer. The Company has previously repurchased 451,791 shares
pursuant to its stock repurchase program, which the Company
believes will effectively reduce the ultimate dilution attributable
to the Company's issuance of 1,205,477 shares pursuant to the
Exchange Offer.
The Cash Tender Option was fully subscribed. Pursuant to the
terms of the Exchange Offer, the Company accepted for purchase
tendered Existing Notes at the lowest bid prices until the Cash
Tender Cap was reached, subject to proration. In exchange for
aggregate cash consideration totaling $15
million, the Company purchased $25,934,000 in aggregate principal amount of
Existing Notes. The Company also paid in cash accrued and unpaid
interest on Existing Notes accepted for purchase in the Exchange
Offer from the applicable last interest payment date to, but not
including, April 28, 2016.
The New Securities issued 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 or to U.S.
persons except pursuant to an applicable exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. In
addition, the shares of the Company's common stock issued pursuant
to the Exchange Offer are not transferrable for 90 days from the
date of issuance, subject to certain exceptions. 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.
Oppenheimer & Co. acted as exclusive financial adviser and
dealer manager in the Exchange Offer.
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
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SOURCE ION Geophysical Corporation