Allis-Chalmers makes offer to purchase up to $100 million 9% notes, $25 million 8½% notes

By Jennifer Chiou

New York, May 20 - Allis-Chalmers Energy Inc. announced the start of a cash tender offer for up to $100 million of its $255 million of 9% senior notes due Jan. 15, 2014 and up to $25 million of its $250 million of 8½% senior notes due March 1, 2017.

Purchase prices will be determined using a modified Dutch auction procedure.

For each $1,000 principal amount, the company said it will pay between $570.00 and $650.00 for the 9% notes and $520.00 to $600.00 for the 8½% notes, including a $20.00 early participation payment for those who tender by 9 a.m. ET on June 3.

The total consideration will be determined using a base price plus a clearing premium not to exceed $80.00.

Allis-Chalmers said it also will pay accrued interest to the settlement date.

The offer ends at 5 p.m. ET on June 18. It is conditioned on financing.

RBC Capital Markets Corp. (212 618-2204) is the dealer manager. Global Bondholder Services Corp. (866 470-3600 or call collect 212 430-3774) is the information agent and depositary.

Allis-Chalmers Houston-based oilfield services company.

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