ION Geophysical: $113.5 million 9 1/8% notes tendered for exchange

By Wendy Van Sickle

Columbus, Ohio, April 13 – ION Geophysical Corp. said $113.5 million, or 94.1%, of its $120,569,000 outstanding 9 1/8% second-lien notes due 2021 (Cusips: 462044AH1, 462044AF5, 462044AG3) were tendered for exchange under its swap offer for any and all of the notes, according to a press release.

The offer expired at 11:59 p.m. ET on April 12.

The company previously waived the 95% minimum tender condition. With the waiver of the minimum condition, all of the closing conditions for the exchange offer had been or would be satisfied, the company said.

The exchange offer was extended in conjunction with an extension of a rights offering for its common stock shareholders to subscribe to either $50 million of new notes or common stock issued at $2.57 per share. The rights offering was extended to 5 p.m. ET on April 12.

By the early tender time, 11:59 p.m. ET on March 24, the company said it received tender instructions and consents for $113,224,000 of the notes. The early tally was sufficient to pass the concurrent consent solicitation.

As announced on March 10, the company was offering to exchange the old notes for new 8% senior secured priority notes due 2025 and other consideration.

The company offered 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 was to 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 was initially set to expire at 11:59 p.m. ET on April 8.

Noteholders who tendered their notes were deemed to have given consent in the consent solicitation.

The company was 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.

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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