ION announces Rights Offering for new convertible Second Lien Notes or common stock
March 05 2021 - 6:34PM
ION Geophysical Corporation (NYSE: IO) announced today that it is
proceeding with steps to launch its previously announced rights
offering (“Rights Offering”) for its New Second Lien Convertible
Notes (“New Notes”) or its Common Stock, as part of its
restructuring transactions (the “Restructuring Transactions”)
approved by shareholders on February 23, 2021. The Company has
filed a registration statement on Form S-1 with the Securities and
Exchange Commission (“SEC”). The Company expects to launch the
rights offering after the Registration Statement is declared
effective by the SEC.
Each of our shareholders as of March 15, 2021 (the “Record
Date”) will receive one non-transferable subscription right
(“Right”) for each share of our Common Stock they own. Each Right
will entitle a holder to purchase (i) a principal amount of our New
Notes equal to $50,000,000 divided by the number of shares of our
Common Stock outstanding as of the Record Date, at a purchase price
of 100% of the principal amount thereof or (ii) a number of shares
of our Common Stock equal to $50,000,000 divided by the purchase
price of $2.57 per share divided by the number of shares of our
Common Stock outstanding as of the Record Date, at a purchase price
of $2.57 per whole share of Common Stock; provided that any New
Notes will only be issued in minimum increments of $1,000 and any
exercise of Rights therefore will be rounded down to the nearest
whole increment of $1,000 and any shares of Common Stock will only
be issued in whole numbers of shares with any fractional shares of
our Common Stock rounded down to the nearest whole share.
As of March 5, 2021, we had 17,960,434 shares of Common Stock
outstanding such that each Right would entitle a holder to purchase
(i) $2.78 principal amount of our New Notes or (ii) 1.08 shares of
our Common Stock. Each holder of a Right will be entitled to an
over-subscription privilege to purchase additional securities that
may remain unsubscribed as a result of any unexercised rights. We
expect to distribute the certificates evidencing the Rights and
other materials related to the Rights Offering shortly after the
Record Date.
In connection with the Rights Offering, as of March 2, 2021, we
have entered into backstop agreements (the “Backstop Agreements”)
with several parties (the “Backstop Providers”) pursuant to which
the Backstop Providers have agreed, in the aggregate, to purchase
in excess of $20,000,000 of New Notes at par or shares of Common
Stock at $2.57 per share (the “Backstop Commitment”). The Backstop
Agreements are subject to customary terms and conditions, including
payment, in principal amount of New Notes or shares of Common Stock
at $2.57 per share, of a backstop fee in an amount up to five
percent (5%) of the Backstop Commitment. To complete the Rights
Offering and effect the Restructuring Transactions, we must receive
net proceeds of at least $20,000,000 from the Rights Offering. The
current Backstop Commitment will allow ION to satisfy this
condition.
Further details of the rights offering will be publicly
announced and a prospectus supplement containing the detailed terms
of the rights offering will be filed with the SEC following
clearance of the registration statement by the SEC. For additional
details regarding the Restructuring Transactions, including the
Exchange Offer and the Rights Offering, please see our Current
Report on Form 8-K filed with the SEC on February 12, 2021.
A registration statement relating to these securities
has been filed with the Securities and Exchange Commission, but has
not yet become effective. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration
statement becomes effective. The information in this press release
is not complete and is subject to change. This press release shall
not constitute an offer to sell or a solicitation of an offer to
buy the securities, nor shall there be any offer, solicitation or
sale of the securities in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful under the securities
laws of such state or jurisdiction. The Rights Offering will be
made only by means of prospectus. Copies of the prospectus, when it
becomes available, will be distributed to all eligible stockholders
as of the Rights Offering Record Date and may also be obtained free
of charge on the SEC website at
www.sec.gov or by contacting the
information agent, D.F. King & Co., Inc., for the Rights
Offering.
About IONLeveraging innovative technologies,
ION delivers powerful data-driven decision-making to offshore
energy and maritime operations markets, enabling clients to
optimize operations and deliver superior returns. Learn more at
iongeo.com.
ContactMike MorrisonExecutive Vice President
and Chief Financial Officer+1.281.879.3615
The information herein contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements may include information and other
statements that are not of historical fact. Actual results may vary
materially from those described in these forward-looking
statements. All forward-looking statements reflect numerous
assumptions and involve a number of risks and uncertainties. These
risks and uncertainties include the risks associated with the
timing and development of ION Geophysical Corporation's products
and services; pricing pressure; decreased demand; changes in oil
prices; agreements made or adhered to by members of OPEC and other
oil producing countries to maintain production levels; the COVID-19
pandemic; our ability to complete the Restructuring Transactions
and other related matters in a timely manner, if at all; and
political, execution, regulatory, and currency risks. For
additional information regarding these various risks and
uncertainties, see our Form 10-K for the year ended December 31,
2020, filed on February 12, 2021, and our Forms S-1 and S-4, filed
on January 29, 2021, and amended on February 12, 2021 and March 3,
2021. Additional risk factors, which could affect actual results,
are disclosed by the Company in its filings with the Securities and
Exchange Commission ("SEC"), including its Form 10-K, Form 10-Qs
and Form 8-Ks filed during the year. The Company expressly
disclaims any obligation to revise or update any forward-looking
statements.
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