SAExploration launches offer to exchange 10% notes due 2019

By Wendy Van Sickle

Columbus, Ohio, Dec. 22 – SAExploration Holdings, Inc. began an exchange offer and consent solicitation for its $85 million of 10% senior second-lien notes due 2019 issued in July 2016 and its $1.9 million of 10% senior secured notes due 2019 issued in July 2014, or the “stub notes,” according to a press release.

If at least a total principal amount of $86,239,643 of the notes are tendered and accepted for exchange, the company said it will issue 1,883,964 new shares of common stock; 35,000 new shares of its series A perpetual convertible preferred stock; 945,000 new shares of its series B convertible preferred stock; and 8,169,822 warrants to purchase 8,169,822 shares of common stock.

The series B convertible preferreds are mandatorily convertible into 20,542,196 shares of common stock upon receipt of requisite stockholder approval.

For each $1,000 principal amount of second-lien or stub notes tendered for exchange, the company is offering 21.8457 new common shares, 0.4058 series A preferred shares, 10.9578 series B preferred shares and 94.7339 series C warrants.

Holders will also receive accrued interest to the redemption date.

Concurrently with the exchange, SAExploration is soliciting consents from holders of the second-lien notes to release all of the collateral from the liens securing the notes and adopt some amendments to the note indenture.

Holders of at least two-thirds of the outstanding principal amount of the second-lien notes will be required to approve the collateral release.

The company is also soliciting consents from holders of the stub notes to release all of the collateral from the liens securing the notes and adopt some amendments to the note indenture.

No additional consideration will be paid for consents for either set of notes.

The exchange offer and consent solicitation will expire at 5 p.m. ET on Jan. 24.

Settlement will occur promptly thereafter.

Notes and consents may be withdrawn up to the expiration time.

The exchange offer is contingent on at least 95% of the second-lien notes being tendered.

The company announced on Dec. 20 that it had reached an agreement in principle with holders of 90% of the second-lien notes to exchange the notes for stock and equity intsruments.

“We have spent the last year and a half working collaboratively with our stakeholders to de-lever our balance sheet and provide additional liquidity during a very difficult market,” Jeff Hasting, chairman and chief executive officer of the company, said in a news release at that time.

SAExploration has also reached an agreement in principle to increase its revolver to $20 million to allow it to make the Jan. 15 interest payment on the notes.

SAExploration is a Houston-based oilfield services company.

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