2013-01-15 21:49:15 -
HOUSTON, TX - January 15, 2013 - Geokinetics Inc. (OTC: GEOK), today announced
that it has entered into a restructuring support agreement regarding the terms
of a comprehensive recapitalization of the Company with holders of more than
70% in aggregate principal amount of its 9.75% senior secured notes due 2014 and
the largest holder of the Company's preferred stock. Under the terms of the
restructuring support agreement:
* The entire $300 million of the Company's senior secured notes will be
converted into common equity and the noteholders will become the majority
equity owners of the Company at the consummation of the restructuring
* Holders of senior secured notes will provide up to $25 million of financing
that will be converted to equity at consummation of restructuring
* Company operations are expected to remain unaffected
David J. Crowley, Geokinetics President and Chief Executive Officer, commented,
"We are pleased to announce that this agreement has been reached consensually,
affording us the ability to expedite the restructuring process. With new backing
from our strong and experienced sponsors, we are confident in our ability to
seamlessly deliver quality service in the near term. We are also very excited at
the long term prospects for Geokinetics, with the restructured company having a
substantially de-levered balance sheet, reduced interest expense and a number of
compelling prospects for growth on the horizon in all three product lines;
Seismic Acquisition, Multi-Client seismic services and seismic Processing and
Interpretation."
Under the terms of the restructuring support agreement, the stakeholder parties
to the agreement have agreed to vote in favor of either a pre-negotiated or a
pre-packaged restructuring plan under chapter 11 of title 11 of the U.S. Code in
the United States Bankruptcy Court for the District of Delaware. The plan will
provide for the conversion of the Company's senior secured notes into newly
issued common equity of the Company representing 100% of the Company's issued
and outstanding common stock after the issuance (subject to dilution for a
management incentive plan and conversion of the debtor in possession financing
described below), the repayment of the existing revolving credit facility in
full, the payment in full of unsecured creditors, including trade vendors, and a
cash payment to certain of the Company's preferred stockholders. As a result,
the Company's existing common stock and all classes of preferred stock will be
canceled.
The recapitalization is not expected to have an impact on the Company's
operations and it will seek to pay unsecured trade and other creditors in full
either in the ordinary course of business or at the conclusion of the chapter
11 case.
A special committee of the Company's board of directors unanimously approved
entering into the restructuring support agreement. As part of the restructuring
process, the Company expects to enter into a new credit facility to provide the
Company with liquidity for operations after the restructuring. During the
restructuring process, subject to conditions in the restructuring support
agreement, certain holders of the senior secured notes have agreed to backstop
up to $25 million in a debtor-in-possession financing facility to allow the
Company to finance its operations. On the effective date of the Company's
chapter 11 plan, the debtor-in-possession financing facility will be converted
to common stock of the reorganized Company at a discount to chapter 11 plan
value.
The parties' commitment under the restructuring support agreement and the
completion of the transactions contemplated by the restructuring support
agreement are subject to a number of closing conditions, termination rights and
approvals, including the majority of the noteholders reaching an agreement with
respect to various corporate governance arrangements, the approval of the
bankruptcy court, and the finalization of definitive documentation. It is the
Company's intention to request court approval to emerge from bankruptcy by the
end of the first quarter of 2013.
Geokinetics Inc. is a leading provider of seismic data acquisition, seismic data
processing services and multi-client seismic data to the oil and gas industry
worldwide. Headquartered in Houston, Texas, Geokinetics is the largest Western
contractor acquiring seismic data onshore and in transition zones in oil and gas
basins around the world. Geokinetics has the crews, experience and capacity to
provide cost-effective world class data to its international and North American
clients. For more information on Geokinetics, visit
www.geokinetics.com.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements include, without
limitation, statements about the terms of a proposed plan of restructuring, the
Company's operations and business during and after the restructuring process,
the Company's intent to file voluntary petitions for protection under chapter
11 of the U.S. Code in the United States Bankruptcy Court for the District of
Delaware to implement such plan of restructuring, the anticipated benefits of
the restructuring support agreement and the related transactions, expected
timing of the completion of the transactions contemplated by the restructuring
support agreement, the exit credit facility and other aspects of the proposed
restructuring. The Company has based these forward-looking statements on its
current expectations and projections about future events based upon knowledge of
facts as of the date of this report and its assumptions about future events.
These forward-looking statements are subject to various risks and uncertainties
that may be outside the Company's control, including whether the requisite
parties are able to agree on definitive terms of a restructuring plan and all
requisite approvals are received. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Contact:
Gary L. Pittman
Chief Financial Officer
(713) 850-7600
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Geokinetics Inc. via Thomson Reuters ONE
[HUG#1670699]
