SAExploration further revises plan, amends backstop agreements

By Sarah Lizee

Olympia, Wash., Dec. 9 – SAExploration Holdings, Inc. revised again its plan and related disclosure statement and made some amendments to its backstop commitment agreement, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Settlement, modified plan

The company engaged in negotiations with various stakeholders to achieve a consensual plan, including with the ad hoc committee of term lenders, which raised some potential objections to the plan. These negotiations resulted in a settlement to resolve potential objections. Under the settlement, the ad hoc committee of term lenders will receive a payment in the amount of $625,000 on the effective date of the plan.

In addition, Tegean Capital Management LLC, a member of the ad hoc committee of term lenders, became a party to the backstop agreement and will backstop $1 million of the first-lien exit facility.

The ad hoc committee of term lenders will also benefit from certain preemptive rights in the first-lien exit facility and the new organizational documents.

Backstop amendment

The debtors had previously entered into a restructuring support agreement with supporting lenders and noteholders.

The agreement contemplates that the company will enter into restructuring transactions that will include, among other things, the entry into a $15 million first-lien exit term loan facility, as modified by the settlement, the conversion of the ABL credit facility into a new $20.5 million second-lien exit facility with the existing lenders under the ABL credit facility and a rights offering under which all eligible holders of loans under the ABL credit agreement and loans under the term loan credit agreement will be offered the opportunity to purchase loans to be advanced under the first-lien exit facility and new shares of common stock in the reorganized company for an aggregate purchase price of $15 million, with the rights offering being backstopped.

The backstop agreement was amended to provide for Tegean to become a backstop party for all purposes under the backstop agreement. However, Tegean will not be entitled to any of the fee and expense reimbursement provisions in the backstop agreement, nor will it be entitled to any backstop commitment premium.

The amended backstop agreement also provides that Tegean will purchase term loans under the first-lien exit facility and new first-lien exit facility equity for which the ad hoc committee of term lenders receive but do not exercise subscription rights under the rights offering, with any remaining term loans under the first-lien exit facility and new first-lien exit facility equity that are not purchased in the rights offering being purchased by the backstop parties other than Tegean.

SAExploration is a Houston-based oil field services company. The company filed bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on Aug. 27 under Chapter 11 case number 20-34306.

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