Grant Geophysical misses coupon payment, may default

By Carlise Newman

Chicago, Feb. 27 - Grant Geophysical , Inc. said it failed to make the $2.1 million interest payment due Feb. 18 on its 9¾% senior notes maturing 2008 and may fail to pay within the 30-day grace period as well, resulting in default and a possible bankruptcy filing.

As of Thursday, Elliott Associates LP, lender on Grant's credit facility, refused to make any additional credit available to the company.

Due to its financial condition, Grant Geophysical said it is unlikely any alternative financing will be available and cash from operations will not be sufficient to fund the coupon.

Consequently, unless the company is allowed to borrow additional amounts under the credit facility, it is unlikely Grant will be able to make the payment on or before March 20, the end of the grace period.

If payment is not made within the grace period, Elliott is entitled to refuse to advance additional amounts to the company under the credit facility and could cause the debt to become immediately due and payable. If any of Grant Geophysical's debt was accelerated, the company may have to file for bankruptcy protection.

Houston-based Grant Geophysical also amended its credit facility to suspend some payments owed - but agreed that suspension constituted an event of default under the credit facility, entitling Elliott to accelerate the maturity of all amounts owed. Elliott has agreed to forebear from accelerating the amounts on account of an event of default.

The amendment, dated Feb. 20, suspends the payments until March 7.

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