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Key Energy 6 3/8% noteholders accelerate payment after company fails to file 10-K
By Caroline Salls
Pittsburgh, Sept. 19 - Key Energy Services, Inc. received a notice of acceleration from the holders of $51 million of its $150 million 6 3/8% senior notes due 2013, according to a company news release.
Holders of 25% or more of the outstanding balance of the notes have the right to accelerate them and demand immediate payment as a result of the company's failure to file its form 10-K financial report with the Securities and Exchange Commission for the year ended Dec. 31, 2003.
According to the release, Key Energy believes the notice is defective, and if and when it receives a valid notice of acceleration and demand for payment, it will pay the outstanding principal and accrued interest on the notes.
In July, Key Energy obtained a $547.25 million senior credit facility, which includes a $400 million seven- year delayed-draw term loan B facility that is available to repay notes.
If it is required to repay the notes, the company said it would borrow $150 million under this facility for the outstanding principal and will fund the interest payment from cash on hand.
At Sept. 15, cash and short-term investments totaled about $102 million.
As a result of the failure to file the 2003 form 10-K report, the holders of the company's 8 3/8% senior notes due 2008 also have the right to accelerate the notes and demand repayment in full.
However, Key Energy has not received any notice of acceleration on the 8 3/8% notes.
The balance of the delayed-draw term loan B is available to repay these notes, if necessary, the release said.
Key Energy is a Midland, Texas, rig-based, onshore well service company.
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