Omni Energy settles defaults, extinguishes debentures with stock, cash and notes

By Sheri Kasprzak

Atlanta, May 18 - Omni Energy Services Corp. has settled with the holders of its 6.5% subordinated convertible debentures.

Omni had filed a lawsuit in January against debenture holders Provident Premier Master Fund, Ltd.; Portside Growth and Opportunity Fund; Manchester Securities Corp.; Elliott Management Corp.; Gemini Investment Strategies LLC; Ramius Capital LLC and Gemini Master Fund Ltd., alleging the investors of the debentures engaged in short-swing trading.

Under the terms of a settlement to which the parties agreed Wednesday, Omni will pay the debenture holders $4 million in cash, issue 2 million common shares and issue $4.3 million in subordinated notes payable over three years. The notes bear interest at 8% annually.

The settlement completely extinguishes the 6.5% debentures and cures Omni's outstanding defaults. It also means the lawsuit Omni filed against the investors has been dropped.

Omni Energy, based in Carencro, La., provides onshore seismic data and transportation services to oil and gas companies.

After the settlement was announced Wednesday afternoon, Omni Energy's stock closed up $0.14 at $1.92.

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