Seitel Announces Bankruptcy Court Approval of Disclosure Statement; Record Date Set for Voting on Reorganization Plan
February 06 2004 - 10:56AM
PR Newswire (US)
Seitel Announces Bankruptcy Court Approval of Disclosure Statement;
Record Date Set for Voting on Reorganization Plan HOUSTON, Feb. 6
/PRNewswire-FirstCall/ -- Seitel, Inc. (BULLETIN BOARD: SEIEQ)
("Seitel", the "Company" and collectively with certain
subsidiaries, the "Debtors") announced that it has received
Bankruptcy Court approval of its Third Amended Disclosure Statement
(the "Disclosure Statement") filed in connection with Seitel's
previously announced plan of reorganization (the "Plan"). In
connection with approval of the Disclosure Statement, the
Bankruptcy Court also established February 4, 2004 as the voting
record date for holders of claims and equity interests in the
Debtors. The Disclosure Statement, including the Plan and ballots
for voting on the Plan are expected to be mailed to record holders
not later than February 12, 2004. The voting period for the Plan
ends at 5:00 PM on March 9, 2004. The Bankruptcy Court has set a
hearing for March 18, 2004, at 1:30 PM prevailing eastern time to
consider confirmation of the Plan. The Plan, which is supported by
a standby funding commitment from Mellon HBV Alternative Strategies
LLC ("HBV") and is subject to various conditions to effectiveness,
would result in payment of 100% ofcreditors' claims in cash,
together with all post-petition interest. Each of Seitel's equity
holders, as of a warrant record date that will be five days prior
to the effective date of the Plan (the "Warrant Record Date"),
would have the right to receive an equivalent number of shares of
reorganized Seitel's common stock plus warrants entitling each
holder thereof to purchase such number of shares of reorganized
Seitel common stock as required to retain its percentage equity
ownership in Seitel (subject to adjustment and dilution as set
forth below). The warrants will have an exercise price of 60 cents
per share, subject to adjustment for certain recapitalization
events. The aggregate exercise price of the warrants would be $75
million. The Company intends that the warrants will be freely
transferable and exercisable for 30 days following the effective
date of the Plan. Each equity holder who does not exercise its
warrants will, as a result, suffer up to approximately 83% dilution
in its percentage equity ownership of reorganized Seitel, not
including the additional warrants to be issued to Mellon as
described below. Subject to the Plan becoming effective, HBV
(together with other investors to whom HBV may assign an interest)
has committedto purchase up to $75 million of reorganized Seitel's
common stock in the event such stock is not purchased by Seitel's
shareholders through the exercise of warrants. As compensation for
its standby commitment, HBV will be issued additional warrants to
acquire up to 10% of the fully diluted shares of common stock of
reorganized Seitel. HBV's additional warrants will have an exercise
price of 72 cents per share, subject to adjustment for certain
recapitalization events, and will expire on the seventh anniversary
of their issuance. The funding of payments for claims under Plan is
to be provided from a portion of Seitel's existing cash balances,
the sale of new common stock pursuant to the warrants to be issued
to shareholders as of the Warrant Record Date and not less than
$180 million in proceeds of a high yield debt placement. The
Company also anticipates entering into a new revolving credit
facility to supplement its working capital needs following the
effective date of the Plan and is engaged in preliminary
discussions with certain lending sources. The foregoing is only a
brief summary of the Plan and holders of Claims and Equity
Interests entitled to vote are urged to read the Disclosure
Statement and its exhibits, including the Plan carefully and in
their entirety. Any conflicts between the Plan and this summary
will be determined solely by reference to the Plan. There can be no
assurance that the Plan will be confirmed by the Bankruptcy Court
or will become effective or the timingthereof. This press release
does not constitute an offer to sell or the solicitation of an
offer to buy any securities of the Company. The securities may not
be offered or sold in the United States absent registration under
the Securities Act of 1933, as amended (the "Securities Act"), or
an applicable exemption from such registration. There shall not be
any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. ABOUT SEITEL Seitel markets its proprietary seismic
information/technology to more than 400 petroleum companies,
licensing data from its library and creating new seismic surveys
under multi-clientprojects. Statements in this release about the
future outlook related to Seitel involve known and unknown risks
and uncertainties, which may cause the Company's actual results to
differ materially from expected results. While the Company believes
itsforecasting assumptions are reasonable, there are factors that
are hard to predict and influenced by economic and other conditions
that are beyond the Company's control. Among the other important
factors which could cause actual results to differ materially from
those in the forward-looking statements are potential changes in
the terms of the proposed amended plan of reorganization, the
failure of the Bankruptcy Court to confirm the amended plan, or the
failure of the amended plan to otherwise become effective, as well
as other factors detailed in the Disclosure Statement or in
Seitel's filings with the Securities and Exchange Commission,
including its most recent Form 10-K Annual Report, a copy of which
may be obtained from the Company without charge. DATASOURCE:
Seitel, Inc. CONTACT: Seitel, Inc., +1-713-881-8900 Web site:
http://www.seitel-inc.com/
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