SAExploration receives tenders for 98.7% of 10% notes into exchange

New York, July 25 – SAExploration Holdings, Inc. said holders tendered $138,128,000, or 98.7%, of its $140 million of outstanding 10% senior secured notes due 2019.

All the tendered notes will be accepted for exchange and settlement of the offer is planned for July 27, according to a news release.

The exchange offer and consent solicitation expired at 11:59 p.m. ET on July 22.

SAExploration announced the transaction on June 24, saying it was offering to exchange the existing notes for up to $70 million principal amount of new 10% senior secured second-lien notes due 2019 and 6,497,979 newly issued shares of common stock.

SAExploration was also soliciting consents to adopt proposed amendments to the note indenture, the existing intercreditor agreement and the related collateral and security agreements relating to the existing notes.

The company is not offering a consent fee.

In exchange for each $1,000 principal amount of notes tendered and accepted, holders will receive $500 principal amount of new notes and 46.41 shares (giving effect to a 135-for-1 reverse stock split that will occur in connection with the closing of the exchange offer).

Holders will also receive accrued interest up to but excluding the settlement date, which will be paid in the form of new notes.

Existing notes may be tendered for exchange only in principal amounts equal to the minimum denomination of $2,000 and integral multiples of $1,000 in excess thereof.

Until July 15, 2017, the company may pay interest on the new notes in kind at a rate of 11% per year.

The new notes will be fully and unconditionally guaranteed on a senior secured second-lien basis by each of SAExploration’s existing and future domestic restricted subsidiaries, except for immaterial subsidiaries and foreign subsidiaries. These are the same subsidiaries that currently guarantee the existing notes.

The company expects to enter into a new $30 million multi-draw senior secured term loan facility with some holders of existing notes.

The exchange offer is subject to the participation of at least 90% of the existing notes outstanding, the entry into the proposed amendments and SAExploration having borrowed $5.6 million under the new term loan.

The adoption of the proposed amendments is subject to the receipt of consents from holders of a majority of the principal amount of outstanding existing notes and SAExploration’s entry into an amendment to its existing revolving credit facility to permit the proposed amendments.

The consent solicitation is not conditioned on the completion of the exchange offer.

Support agreement

As reported on June 13, the company entered into a comprehensive restructuring support agreement with the holders of about 66% of the existing notes.

Under the agreement, the supporting noteholders agreed to enter into and implement a proposed comprehensive restructuring of SAExploration’s balance sheet, which includes providing the new term loan to meet the company’s expected cash needs until it can monetize its tax-credit-related account receivables.

As part of the consideration for providing the new term loan, the company agreed to issue shares equal to 28.2% of the outstanding shares of its common stock as of the closing of an exchange offer.

As a result of the issuance of shares to the lenders under the new term loan and to tendering noteholders, assuming maximum participation in the exchange offer, SAExploration expects to issue to the tendering noteholders 92.68% of the outstanding shares as of the closing of the exchange offer.

In addition, the company said it expects current equityholders to hold 1.32% of the company after the restructuring transactions are complete, with an opportunity to own a further 4.5% of the company through warrants.

As of June 13, members of management and company directors owned 44.3% of the outstanding shares of common stock.

The information agent for the exchange offer and consent solicitation is D.F. King & Co., Inc. (877 283-0317, 212 269-5550 or www.dfking.com/sae).

SAExploration is a Houston-based oilfield services company.

© 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.