Superior Energy pushes back early date for exchange offer, consent bid

By Wendy Van Sickle

Columbus, Ohio, Jan. 16 – Superior Energy Services, Inc. announced that wholly owned subsidiary SESI, LLC has extended the early participation date of its offer to exchange up to $500 million of its $800 million outstanding 7 1/8% senior notes due 2021 for up to $500 million of newly issued 7 1/8% senior notes due 2021 and cash.

The early participation date is now 5 p.m. ET on Jan. 22, pushed back from 5 p.m. ET on Jan. 17.

As reported on Jan. 6, the company is offering for each $1,000 principal amount of original notes tendered at or prior to the early participation date, an exchange consideration of $950 principal amount of new notes, subject to proration, an early participation premium of $50 principal amount of new notes, subject to proration, and a cash consent payment of $2.50.

Holders tendering after the early participation date will not be eligible to receive the early participation payment or the consent payment.

The offer expires at 11:59 p.m. ET on Feb. 3. The offer is expected to settle the second business day after that.

In connection with the exchange offer, SESI is also soliciting consents from holders to amend the Dec. 6, 2011 indenture governing the original notes. The company is seeking to amend the lien covenant to permit the issuance of superior secured notes.

In order for the proposed amendment to be adopted, holders of a majority of the outstanding principal amount of notes must consent to the change and those consents must be received by the earlier of the early participation date and the date on which the necessary consents are received and a supplemental indenture is executed.

The exchange offer is conditioned on the tender of at least $250 million of original notes; however, the company may choose to reduce that threshold to $200 million.

The offer is not conditioned, though, on receiving the required consents.

However, if the needed consents are not received, the maximum aggregate principal amount of original notes that will be accepted and exchanged will be limited to $250 million, subject to proration, and the consent payment will not be made.

The exchange offer and consent solicitation is being conducted in connection with Superior Energy’s previously announced entry into a definitive agreement to divest its U.S. service rigs, coiled tubing, wireline, pressure control, flowback, fluid management and accommodations service lines and combine them with Forbes Energy Services Ltd.’s complementary service lines. The exchange offer is conditioned on the combination, but the combination is not conditioned on the exchange offer and consent solicitation.

With the combination, the new notes will automatically exchange into up to $250 million of 8% senior second-lien secured notes due 2027 to be issued by Spieth Newco, Inc.; and, only to the extent that the necessary consents are received in the consent solicitation, in an amount equal to the difference between the aggregate amount of new notes issued in the exchange and $250 million, up to an additional $250 million of 8% senior second-lien secured notes due 2027 to be issued by SESI, which would be the superior secured notes.

However, if the needed consents are not received, no superior secured notes will be issued.

The indenture governing the Speith Newco notes will contain restrictive covenants customary for issuances of high-yield secured notes of this type, and the indenture governing the superior secured notes will contain restrictive covenants similar to those contained in the indenture governing SESI’s 7¾% senior notes due 2024.

Following the combination, and assuming the exchange offer is fully subscribed, SESI expects to keep the remaining $300 million of original notes outstanding. However, if the combination is not completed by May 31 or Superior Energy determines in good faith that it will be more likely than not that it will be required to treat Newco as a consolidated subsidiary following the combination, the new notes issued in the exchange offer will be automatically exchanged for an equal principal amount of original notes to be issued as add-on notes.

D.F. King & Co., Inc. (attn.: Andrew Beck, 212 269-5550, 800 431-9633, spnv@dfking.com) is the information agent for the Rule 144A and Regulation S exchange offer and consent solicitation.

Based in Houston, Superior Energy provides oilfield services and equipment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.