ION Geophysical sees $113.22 million early tenders in exchange for 9 1/8% notes

By Wendy Van Sickle

Columbus, Ohio, March 25 – ION Geophysical Corp. announced the early results of its 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.

By the early tender time, 11:59 p.m. ET on March 24, the company received tender instructions and consents for $113,224,000 of the notes. The early tally is sufficient to pass the consent solicitation but does not meet the 95% minimum participation condition for the exchange offer, the company reported Thursday.

As announced on March 10, 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 of $35 will be, at the company’s option, paid either in common stock of the company based on $2.57 per share or new notes.

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 needed consents from 66 2/3% of noteholders to adopt the proposed amendments.

Conditions of the offer include a minimum participation condition.

Additionally, 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.

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.

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