Geo Energy starts tender offer and consent solicitation for 8% senior notes due 2022

Chicago, May 20 – Singapore’s Geo Energy Resources Ltd. began a consent solicitation and tender offer for Geo Coal International Pte. Ltd.’s 8% senior notes due 2022, according to an announcement.

The company is offering to purchase any and all of its outstanding $154,017,000 principal amount of notes (ISINs: USY2700AAB53, US37255AAB70) concurrently with a consent solicitation to approve certain proposed amendments to its indenture dated Oct. 4, 2017.

Consent solicitation

The company needs to procure consent from at least 75% of the outstanding principal amount of notes to adopt one amendment and a majority to adopt the second proposed amendment.

The amendments attempt to address the declining demand outlook for coal.

The indenture currently contains a mandatory-offer-to-purchase covenant if the group if the group is unable to satisfy certain minimum coal reserve requirements by April 4, 2021. The group currently does not meet these requirements.

Because of the Covid-19 pandemic and macroeconomic conditions, there can be no assurance the group will complete an acquisition before that time.

The group is also seeking increased financial flexibility and access to liquidity.

Therefore, the group is seeking to modify the amendments in two primary ways:

• First, to remove the mandatory offer to purchase covenant, and

• Second, to increase the working capital permitted debt basket by $15 million and the general permitted debt basket by $10 million.

Holders may deliver consents without tendering their notes.

The deadline for consents is 5 p.m. ET on June 4.

Consenting noteholders will receive a consent fee of $10 per $1,000 face amount of notes.

Tender offer

All notes validly tendered by 11:59 p.m. ET on June 18 will be accepted for purchase.

Holders who tender, and do not withdraw, their notes by the early tender deadline at 5 p.m. ET on June 4 will receive $430 per $1,000 principal amount of notes, inclusive of an early tender payment of $30.

Noteholders who tender after the tender withdrawal deadline will receive $400 per $1,000 face amount of notes.

To tender notes, a tendering holder must consent to the proposed amendments. To tender the notes, and not withdraw the tender, is to be deemed to have consented to the proposed amendments.

The offer is expected to be funded with cash on hand.

Settlement is expected for June 23.

Morrow Sodali Ltd. is the information and tender agent (203 609-4910, +44 20 7355 0628 or +852 2158 8405, geocoal@investor.morrowsodali.com, https://bonds.morrowsodali.com/geocoal).

Deutsche Bank AG, Singapore Branch (212 250 6801, +44 20 7545 8011, +65 6423 5342 or +52 2203 8652, liability_management_sea@list.db.com) is the dealer manager and solicitation agent.

Geo Energy is a Singapore-based investment holding company that operates as a coal producer and mine contractor.

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