HOUSTON, Jan. 31, 2020 /PRNewswire/ -- Superior Energy
Services, Inc. ("Superior Energy") (NYSE: SPN) today announced that
its wholly owned subsidiary, SESI, L.L.C. ("SESI" or the "Issuer"),
has amended certain terms of its previously announced offer to
exchange its Original Notes to provide for an offer to exchange
$635 million of its $800 million aggregate principal amount of its
outstanding 7.125% Senior Notes due 2021 (the "Original Notes") for
$635 million of newly issued 7.125%
Senior Notes due 2021 (the "New Notes") (as amended as described
below, the "Exchange Offer"), upon the terms and subject to the
conditions set forth in SESI's offering memorandum and consent
solicitation statement, dated as of January
6, 2020 (as amended by the press releases dated January 16, 2020 and January 22, 2020 and Supplement No. 1 to the
Offering Memorandum and Consent Solicitation Statement, dated as of
January 31, 2020, and as may be
further amended or supplemented from time to time, the "Offering
Memorandum and Consent Solicitation Statement"). SESI has amended
the Exchange Offer in connection with its previously announced
agreement in principle with a steering committee (the "Steering
Committee") of holders of approximately 34% of the outstanding
Original Notes. The Steering Committee is also working together
with other noteholders (collectively with the Steering Committee,
the "Ad Hoc Group") and the Ad Hoc Group owns approximately 60% of
the aggregate principal amount of outstanding Original Notes. All
capitalized terms used but not defined in this press release have
the meanings given to them in Superior Energy's press release
announcing the commencement of the Exchange Offer and Consent
Solicitation, dated January 6, 2020
or the Offering Memorandum and Consent Solicitation Statement, as
applicable.
In connection with the Exchange Offer, SESI is also soliciting
consents (the "Consent Solicitation" and, together with the
Exchange Offer, the "Exchange Offer and Consent Solicitation") from
eligible holders of the Original Notes to amend (the "Proposed
Amendment") the indenture dated December 6,
2011, governing the Original Notes (the "Original Notes
Indenture"), upon the terms and subject to the conditions set forth
in the Offering Memorandum and Consent Solicitation Statement, to
amend the liens covenant in the Original Notes Indenture to permit
the issuance of the Superior Secured Notes (as defined and
described below). If the Proposed Amendment is adopted, the
Original Notes will be governed by the Original Notes Indenture, as
amended by the Proposed Amendment.
Pursuant to the amended Exchange Offer:
- SESI is offering to exchange $635
million of its $800 million
aggregate principal amount of outstanding Original Notes for
$635 million of New Notes as
described in the table below:
CUSIP/ISIN
|
Title of
Original
Notes
|
Outstanding
Principal Amount
|
Title of
New
Notes
|
Interest Rate
of
New Notes
|
Total
Consideration
(per $1,000 of
Original Notes)*
|
Total
Consent
Payment
|
78412FAP9/
US78412FAP99
|
7.125% Senior Notes
due 2021 issued by the Issuer
|
$800,000,000
|
7.125% Senior Notes
due 2021 issued by the Issuer
|
7.125%
|
$1,000 principal
amount of New Notes
|
Cash payment of
$10.00 per $1,000 of Original Notes**
|
* Subject to
proration.
|
** Eligible holders
who validly tender their Original Notes prior to the Expiration
Time will be entitled to receive an aggregate cash payment of $6.35
million divided by the total amount of Original Notes validly
tendered and accepted for exchange in the Exchange Offer (the
"Total Consent Payment"). The Total Consent Payment shall not be
made if the Combination Exchange does not occur.
|
- The Expiration Time has been extended from 11:59 p.m., New York
City time, on February 10,
2020 to 11:59 p.m.,
New York City time on February 13, 2020;
- The Exchange Offer is conditioned upon the valid tender, by the
Expiration Time, of at least $635
million aggregate principal amount of Original Notes and,
therefore, the receipt of consents from eligible holders of over a
majority of the aggregate principal amount of the Original Notes
outstanding to amend (the "Proposed Amendment") the liens covenant
in the indenture governing the Original Notes to permit the
issuance of the Superior Secured Notes as defined and described
below;
- At the settlement of the Combination Exchange, eligible holders
will receive, in exchange for $635
million aggregate principal amount of New Notes held by such
holders at the Combination Exchange Date and accepted for exchange
on a pro rata basis: (i) $250 million
principal amount of 9.750% Senior Second Lien Secured Notes due
2025 to be issued by Spieth Newco, Inc. ("Newco" and such notes,
the "Newco Secured Notes"), (ii) $250
million principal amount of 8.750% Senior Second Lien
Secured Notes due 2026 to be issued by SESI (the "Superior Secured
Notes"), (iii) $135 million in cash
and (iv) $6.35 million in cash
constituting the Total Consent Payment;
- The aggregate principal amount of Newco Secured Notes to be
issued in connection with the Combination Exchange is $250 million;
- The aggregate principal amount of Superior Secured Notes to be
issued in connection with the Combination Exchange is $250 million;
- Subject to certain exceptions and exclusions, so long as the
aggregate principal amount of outstanding Newco Secured Notes
exceeds $150 million, and in the
event that during any semi-annual period commencing on July 1, 2020, excess cash flow (to be described
in the Offering Memorandum and Consent Solicitation Statement) for
such period is positive, Newco will be required, on March 15 and September
15 of each year beginning with March
15, 2021, to make an offer to all holders of Newco Secured
Notes to purchase the maximum principal amount of Newco Secured
Notes that may be purchased with an amount equal to 75% of excess
cash flow for the semi-annual period then ended until the aggregate
principal amount of outstanding Newco Secured Notes is less than
$150.0 million and Newco has a total
leverage ratio of less than 2.0 to 1.0; and
- If any of SESI's 7.750% Senior Notes due 2024 (the "2024
Notes") are outstanding 91 days prior to September 15, 2024 (the "Springing Maturity
Date"), then the Superior Secured Notes will mature on the
Springing Maturity Date.
In addition to the terms referenced above, the indenture
governing the Newco Secured 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 customary for issuances of
high-yield secured notes of this type.
The settlement date for the Exchange Offer will occur promptly
after the Expiration Time and is expected to be the second business
day after the Expiration Time.
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 (OTCQX: FLSS) complementary service lines to create
a new, publicly traded consolidation platform for U.S. completion,
production and water solutions (the "Combination"). The
consummation of the Exchange Offer is a condition of the
Combination; however, the consummation of the Combination is not a
condition of the Exchange Offer and Consent Solicitation.
The Information Agent for the Exchange Offer and Consent
Solicitation is:
D.F. King & Co., Inc.
48 Wall Street, 22nd
Floor
New York, New York 10005
Attention: Andrew Beck
Collect: (212) 269-5550
Toll-free: (800) 431-9633
Email: spnv@dfking.com
The Exchange Offer will only be made to, and the Offering
Memorandum and Consent Solicitation Statement, the Supplement and
other documents relating to the Exchange Offer will only be
distributed to, holders who complete and return an eligibility
letter confirming that they are (i) "qualified institutional
buyers" as defined in Rule 144A under the Securities Act of 1933,
as amended ("Securities Act"), or (ii) outside the United States and persons other than "U.S.
persons" as defined in Rule 902 under the Securities Act in
offshore transactions in compliance with Regulation S, who are
"non-U.S. qualified offerees" (as defined in the eligibility
letter) (such persons, "Eligible Holders").
SESI will make the Exchange Offer only to Eligible Holders
through, and pursuant to, the terms of the Offering Memorandum and
Consent Solicitation Statement. Superior Energy and its affiliates
do not and will not make any recommendation as to whether Eligible
Holders should exchange or refrain from exchanging their Original
Notes. Tenders of the Original Notes in the Exchange Offer and
Consent Solicitation may be validly withdrawn at any time at or
before the Withdrawal Deadline but will thereafter be irrevocable,
even if SESI otherwise extends the Exchange Offer and Consent
Solicitation beyond the initial Expiration Time, except in certain
limited circumstances where additional withdrawal rights are
required by applicable law. In the event of termination of the
Exchange Offer, the Original Notes tendered will be promptly
returned to the tendering holders. Requests for documents may
be directed to the Information Agent at the address and telephone
numbers provided above. Documents will only be distributed to
holders of Original Notes that complete and return an eligibility
form at www.dfking.com/spnv confirming that they are Eligible
Holders for the purposes of the Exchange Offer and Consent
Solicitation.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of the
New Notes, Newco Secured Notes or Superior Secured Notes in any
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. In addition, this press
release is neither an offer to purchase nor a solicitation of an
offer to sell any Original Notes in the Exchange Offer or a
solicitation of any consents to the Proposed Amendment. The New
Notes, Newco Secured Notes and Superior Secured Notes have not been
registered under the Securities Act or any state securities laws
and, unless so registered, may not be offered or sold in
the United States except pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws. The New Notes, Newco Secured Notes and
Superior Secured Notes will only be offered and sold to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act and to non-U.S. persons in
transactions outside the United
States pursuant to Regulation S under the Securities
Act.
About Superior Energy
Superior Energy serves the drilling, completion and
production-related needs of oil and gas companies worldwide through
a diversified portfolio of specialized oilfield services and
equipment that are used throughout the economic life cycle of oil
and gas wells.
Forward-Looking Statements
All statements in this press release (and oral statements made
regarding the subjects of this communication) other than historical
facts are forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of
uncertainties and factors, many of which are outside the control of
Superior Energy, SESI and Newco, which could cause actual results
to differ materially from such statements. Forward-looking
information includes, but is not limited to: statements regarding
the timing and effect of the Combination; the ability of SESI to
satisfy the conditions to the settlement of the Exchange Offer and
Consent Solicitation, general market and economic conditions,
changes in law and government regulations and other matters
affecting the businesses of Superior Energy, SESI or Newco, and the
other risks described in the Offering Memorandum and Consent
Solicitation Statement.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and
uncertainties described in Superior Energy's Annual Report on Form
10-K for the year ended December 31,
2018, and those set forth from time to time in Superior
Energy's filings with the Securities and Exchange Commission.
Except as required by law, Superior Energy expressly disclaims any
intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Paul Vincent, VP of Treasury and
Investor Relations, (713) 654-2200
1001 Louisiana St., Suite 2900
Houston, TX 77002
NYSE: SPN
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SOURCE Superior Energy Services, Inc.