Ensign, Trinidad Drilling begin change-of-control offer, consent bid for Trindad’s 6 5/8% notes

By Wendy Van Sickle

Columbus, Ohio, Dec. 28 – Ensign Energy Services Inc. and Trinidad Drilling Ltd. announced that Trinidad has begun a change-of-control offer to purchase any and all of its $350 million outstanding 6 5/8% senior notes due 2025, according to a news release.

The cash purchase price will be 101 plus accrued interest to the settlement date.

Trinidad has also commenced a solicitation of consents to amend the indenture governing the notes to eliminate or modify substantially all of the restrictive covenants as well as certain events of default and other provisions. The proposed amendments must be consented to by the holders of a majority in principal amount of the outstanding notes in order to become effective.

The consent deadline is 5 p.m. ET on Jan. 15.

Holders may deliver their consents without tendering their notes.

Holders who tender their notes by the consent deadline will be deemed to have also delivered their consents. They will receive the total consideration of $1,015 per $1,000 principal amount of notes.

Holders who deliver their consents only will receive the consent payment of $5 per $1,000 principal amount.

Holders who tender their notes after the consent deadline will receive $1,010 per $1,000 principal amount of notes.

The tender offer expires at 11:59 p.m. ET on Feb. 11.

The deadline to withdraw tenders is 5 p.m. ET on Feb. 12.

Consents may be revoked up until the consent deadline.

Settlement is expected to occur on Feb. 14.

Ensign, which now owns a majority of Trinidad’s shares, said it expects to fund the change-of-control offer and the consent solicitation with borrowings under its revolving credit facility and/or proceeds from new debt of Ensign or Trinidad.

Ensign said it does not currently intend to redeem any of the notes that remain outstanding after the change-of-control offer.

Further, Ensign said it plans to continue operating Trinidad in a manner that complies with the indenture, and expects to implement certain arrangements if the requisite consents in the consent solicitation are not obtained.

If notes remain outstanding following the change-of-control offer and the proposed amendments are not adopted, “there can be no assurance that the issuer will not incur the maximum amount of indebtedness permitted under the indenture,” according to the release.

BMO Capital Markets Corp. (212 702-1840 or 833 418-0762) is the dealer manager and solicitation agent.

D.F. King & Co., Inc. (212 269-5550, 888 288-0951 or trinidaddrilling@dfking.com) is the information agent, tender agent and tabulation agent.

Trinidad and Ensign are Calgary, Alta.-based oilfield services companies.

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