ION Geophysical extends forbearance agreements to April 10

By Rebecca Melvin

Concord, N.H., April 5 – ION Geophysical Corp. announced its forbearance agreements with lenders under its credit agreement and holders of more than 79% of its 2025 notes have been extended through April 10, according to a company release Tuesday.

The previous forbearance extensions were through April 4.

The credit agreement amendment is the second for the second forbearance extension under its seventh amendment to the credit agreement dated March 8.

ION remains in continuing discussions with its lenders, the holders of its 2025 notes and other debt regarding various strategic alternatives to strengthen its financial position and maximize stakeholder value. The strategic alternatives include, among others, a sale or business combination transaction or sales of assets, any of which may be executed as part of an in-court or out-of-court restructuring process.

As previously reported, PNC Bank NA has sold and assigned the bank’s lending commitment and outstanding loans under the company’s revolving credit and security agreement dated Aug. 22, 2015 to certain holders of ION’s 2025 notes.

The actions are tied to ION Geophysical’s decision to miss its Dec. 15, 2021 due date to pay outstanding principal and interest on its 9 1/8% notes, and the interest payment on its 8% senior secured second-priority notes due in 2025. According to an 8-K filed with the Securities and Exchange Commission on Tuesday, the missed payment on the 2021 notes did not result in any cross default on the company’s outstanding debt or its credit facility. Under the 2025 notes, the company had a 30-day grace period to cure missed interest payments.

On Jan. 14, the company and PNC Bank, NA entered into a forbearance and fifth amendment to the revolving credit and security agreement dated Aug. 22, 2014 under which PNC agreed to waive, through Feb. 15, a cross default that would have occurred under the credit agreement and to other changes to the terms of the credit agreement. Also on Jan. 14, the company entered into a forbearance agreement with holders of more than 79% of its 2025 notes to forbear until Feb. 15, from enforcing, or taking any action to direct the 2025 notes indenture trustee to enforce, their rights and remedies arising as a result of the missed interest payment.

On Feb. 15, the company and PNC entered into a second forbearance and sixth amendment to the credit agreement, pursuant to which PNC agreed to waive, through March 8, a cross default that would have occurred under the credit agreement and to other changes to the terms of the agreement. Also on that date, the company entered into amendment No. 1 to the 2025 notes forbearance agreement with holders of more than 79% of its 2025 notes to forbear until March 8, from enforcing, or taking any action to direct the 2025 notes indenture trustee to enforce, their rights and remedies arising as a result of the missed interest payment.

ION Geophysical is a Houston-based provider of geophysical technology, services and solutions for the oil and gas industry.

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