ION Geophysical begins exchange, consent for 9 1/8% notes due 2021

Chicago, March 10 – ION Geophysical Corp. started an exchange offer for any and all of its $120,569,000 outstanding 9 1/8% second-lien notes due 2021 (Cusips: 462044AH1, 462044AF5, 462044AG3) and a related consent solicitation, according to a press release.

The company is offering to exchange the old notes for new 8% senior secured priority notes due 2025 and other consideration.

The company is offering as exchange consideration $150 in cash and $850 in new notes per $1,000 of old notes, plus interest paid in cash.

The new notes will have an 8% interest rate and mature on Dec. 15, 2025. Security for the notes will be on a second-priority basis.

Additionally, the new notes are convertible into shares of the company by the noteholders at any time based on a conversion rate which will initially be 333 shares of common stock per $1,000 of new notes, equivalent to an initial conversion price of $3.00 per share of common stock.

An early participation payment will be $35, at the company’s option, paid either in common stock of the company based on $2.57 per share or new notes. The early participation payment is for holders who deliver tenders by the early deadline of 11:59 p.m. ET on March 24.

The exchange offer will expire at 11:59 p.m. ET on April 8, also the withdrawal deadline.

Noteholders who tender their notes will also be deemed to have given consent in the consent solicitation.

The company is seeking to eliminate all of the restrictive covenants and certain of the default provisions in the indenture governing the old notes. The company needs consents from 66 2/3% of noteholders to adopt the proposed amendments.

The offer is conditioned upon several conditions.

First, at least 95% of noteholders must tender their notes.

Second, the company must receive $20 million from a rights offering offered to its common stock shareholders to subscribe to either $50 million of new notes or common stock issued at $2.57 per share, an offer launching soon after the exchange offer.

Noteholders representing around 92% of the old notes have already agreed to support the exchange offer, and the rights offering is similarly backstopped for at least $20 million.

Oppenheimer & Co. Inc. is the dealer manager for the offer.

Copies of the prospectus can be obtained from ION (218 933-3339).

D.F. King & Co., Inc. is the information agent and exchange agent (877 732-3617, 212 269-5550).

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.