HOUSTON, March 6, 2015 /PRNewswire/ -- C&J Energy
Services, Inc. ("C&J" or the "Company") (NYSE: CJES) announced
today that it has revised the debt structure to finance the
proposed combination ("Proposed Transaction") of C&J with the
completion and production services business of Nabors Industries
Ltd. ("Nabors") (NYSE: NBR). At the time of signing the
definitive agreement for the Proposed Transaction, C&J had
obtained commitments from certain financial institutions to provide
debt financing in an amount sufficient to fund the cash portion of
the consideration to be paid to Nabors at the closing of the
Proposed Transaction. The Proposed Transaction remains fully
financed under the revised debt structure and is expected to close
by the end of March 2015, subject to
approval by C&J stockholders and other customary closing
conditions.
Under the revised arrangement, C&J has elected to finance
the Proposed Transaction with term loans and borrowings under its
new revolving credit facility, which allows the Company to maintain
future liquidity at the same interest rates that were expected to
apply to the revolving credit facility when the transaction was
announced in 2014. Specifically, the revised debt structure
is expected to include the same $600
million revolver (with an estimated $92 million drawn at the closing of the Proposed
Transaction) that was previously announced, along with an increased
term loan B comprised of a $510
million term loan B-1 expected to mature 5 years after
closing and a $550 million term loan
B-2 expected to mature 7 years after closing, thereby eliminating
the need for a high yield offering. We calculate that the all-in
yield (inclusive of the applicable margin, upfront fees and issue
price) for the new term loans at the closing date should not exceed
8.25% yield to maturity and the interest rate margins under the
revolving credit facility will remain the same as originally
announced. The covenant package and aggregate interest expense
under the revised debt structure remains substantially consistent
with the original term loan covenant package and aggregate interest
expense.
"We are pleased with this all-loan financing structure, which
reflects a very favorable revision to the committed financing
structure in light of current market conditions. This
enhanced debt structure is expected to provide our combined company
with significant financial flexibility as we manage through a
challenging time for our industry," said Josh Comstock, Founder, Chairman and Chief
Executive Officer of C&J. "The covenant package will
allow us to use our cash flow to optimize our liquidity position
and aggressively manage our debt, while maintaining a strong
balance sheet. Additionally, we believe this will strongly position
us to take advantage of future market improvements and strategic
industry opportunities as we continue to focus on executing our
long-term growth strategy and maximizing value for all of our
shareholders."
For additional information about the revised financing
arrangement for the Proposed Transaction, please see the Current
Report on Form 8-K that C&J filed on March 6, 2015 with the U.S. Securities and
Exchange Commission.
About C&J Energy Services, Inc.
We are an independent provider of premium hydraulic fracturing,
coiled tubing, cased-hole wireline, pumpdown, and other
complementary services with a focus on complex, technically
demanding well completions. These core services are provided
to oil and natural gas exploration and production companies
throughout the United States. In 2014, we introduced our
directional drilling services line to customers as a new service
offering, and we are investing in the growth of this business in
key U.S. markets. Executing on key strategic initiatives, we
expanded our business to blend and supply specialty chemicals for
completion and production services, and we also manufacture and
sell data acquisition and control systems and provide our
proprietary, in-house manufactured downhole tools and related
directional drilling technology. We utilize these products in our
day-to-day operations, and we also provide these products to
third-party customers in the energy services industry.
Headquartered in Houston, Texas,
we operate in some of the most active domestic onshore basins with
facilities across the United States. We also have an office
in Dubai and are in the process of
establishing an operational presence in key countries in the Middle
East. For additional information about C&J, please visit
our website at www.cjenergy.com.
Important Information for Investors and Stockholders
In connection with the Proposed Transaction, Nabors Red Lion
Limited (which will be renamed C&J Energy Services Ltd. as of
the closing of the Proposed Transaction) ("Red Lion") has filed with the SEC a registration
statement on Form S-4 that includes a proxy statement of
C&J Energy Services, Inc. ("C&J") that also
constitutes a prospectus of Red
Lion. On February 13, 2015, the registration statement
was declared effective by the SEC, C&J filed a definitive proxy
statement with the SEC, and Red Lion
filed a definitive prospectus with the SEC. Each of
Red Lion and C&J also plans to
file other relevant documents with the SEC regarding the Proposed
Transaction. This material is not a substitute for the final
prospectus/proxy statement or any other documents the parties will
file with the SEC. Mailing of the definitive proxy
statement/prospectus to the stockholders of C&J commenced on
February 13, 2015. INVESTORS ARE URGED TO READ THE DEFINITIVE
PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) AND OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. You may obtain a free copy of the
registration statement, the definitive joint proxy
statement/prospectus and other relevant documents filed by
Red Lion and C&J with the SEC at
the SEC's website at www.sec.gov. You may also obtain copies
of the documents filed by Red Lion
with the SEC free of charge on Nabors Industries Ltd.'s ("Nabors")
website at www.nabors.com, and copies of the documents filed by
C&J with the SEC are available free of charge on C&J's
website at www.cjenergy.com.
Participants in the Solicitation
C&J, its directors and certain executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of C&J in connection with the Proposed
Transaction. Information about the directors and executive officers
of C&J is set forth in C&J's proxy statement for its 2014
annual meeting of stockholders, which was filed with the SEC on
April 10, 2014. Other information regarding the participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, is contained
in C&J's definitive proxy statement related to the Proposed
Transaction and will be contained in other relevant materials to be
filed with the SEC when they become available. Free copies of these
documents can be obtained using the contact information above.
Investor Contacts
C&J Energy Services, Inc.
investors@cjenergy.com
(713) 260-9986
Media Contacts
Abernathy MacGregor
Tom Johnson or Luke Barrett – (212) 371-5999
Glen Orr -- (713) 205-7770
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SOURCE C&J Energy Services, Inc.