Seitel Announces Agreement for Proposed Amended Reorganization Plan
09 Janeiro 2004 - 7:00PM
PR Newswire (US)
Seitel Announces Agreement for Proposed Amended Reorganization Plan
HOUSTON, Jan. 9 /PRNewswire-FirstCall/ -- Seitel, Inc. (BULLETIN
BOARD: SEIEQ) ("Seitel" or the "Company") announced today that it
signed a standby funding commitment letter with HBV Mellon
Alternative Strategies LLC ("Mellon") whereby Mellon has committed
to purchase up to $75 million of reorganized Seitel's common stock
in the event such stock is not purchased by Seitel's shareholders
through the exercise of warrants to be issued to such shareholders
under Seitel's proposed amended chapter 11 plan of reorganization.
The Mellon commitment was obtained with the assistance and support
of the Official Committee of Equity Holders of Seitel appointed in
the bankruptcy case. The Company expects to file with the
bankruptcy court an amended reorganization plan and a related
amended disclosure statement in mid-January, a Bankruptcy Court
hearing to approve the disclosure statement is presently scheduled
for January 30, 2004, and a confirmation hearing on the
reorganization plan is presently scheduled for March 9, 2004.
Effectiveness of the Mellon standby funding commitment letter is
subject to approval of the bankruptcy court, which will be sought
at the January 30, 2004 hearing, and consummation of the
transactions contemplated thereby is subject to certain conditions,
including the negotiation and execution of definitive
documentation, confirmation by the bankruptcy court of the amended
plan, the absence of material adverse changes, the receipt of
requisite regulatory approvals, consummation of certain other
financing transactions sufficient to make all payments required
under the amended plan, as well as other customary conditions.
Under Seitel's proposed amended plan, which is subject to various
conditions to effectiveness, including confirmation by the
bankruptcy court, Seitel's pre-petition creditors would receive
payment of 100% of their claims in cash, together with all
post-petition interest. Each of Seitel's equity holders, as of a
record date expected to be two days prior to the effective date of
the proposed amended plan, would have the right to receive an
equivalent number of shares of reorganized Seitel's common stock
and warrants entitling the holder thereof to purchase such number
of shares of reorganized Seitel common stock to retain its
percentage equity ownership in Seitel (subject to adjustment and
dilution as set forth below). The warrants would have an exercise
price of 60 cents per share, subject to adjustment for certain
recapitalization events. The aggregate exercise price of the
warrants would be $75 million. The Company intends that the
warrants will be freely transferable and exercisable for 30 days
following the effective date of the proposed amended plan. Each
equity holder who does not exercise its warrants would, as a
result, suffer approximately 83.4% dilution in its percentage
equity ownership of reorganized Seitel not including the additional
warrants to be issued to Mellon as described below. Mellon has
agreed to act as a standby purchaser for up to $75 million (or
83.4%) of the shares of reorganized Seitel's common stock not
purchased by equity holders upon exercise of the warrants. Mellon
presently owns approximately 8% of Seitel's outstanding common
stock. As compensation for its standby commitment, Mellon will be
issued additional warrants to acquire up to 10% of the fully
diluted shares of common stock of reorganized Seitel. The exercise
price of Mellon's additional warrants would be 72 cents per share,
subject to adjustment for certain recapitalization events, and
would expire on the seventh anniversary of their issuance. The
funding of all payments of claims under the proposed amended plan
would be provided from a portion of Seitel's existing cash
balances, and not less than $180 million in proceeds of a high
yield debt placement. Financial advisors working with Seitel,
without any commitment, have expressed confidence in their ability
to complete the required high yield debt placement. The Company
also anticipates entering into a new revolving credit facility to
supplement its working capital needs following the effective date
of the amended plan and is engaged in preliminary discussions with
certain lending sources. There can be no assurance that the amended
plan will be confirmed by the Bankruptcy Court or will become
effective or the timing thereof. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any securities of the Company. The securities may not be offered or
sold in the United States absent registration under the Securities
Act of 1933, as amended (the "Securities Act"), or an applicable
exemption from such registration. There shall not be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
ABOUT SEITEL Seitel markets its proprietary seismic
information/technology to more than 400 petroleum companies,
licensing data from its library and creating new seismic surveys
under multi-client projects. Statements in this release about the
future outlook related to Seitel involve known and unknown risks
and uncertainties, which may cause the Company's actual results to
differ materially from expected results. While the Company believes
its forecasting assumptions are reasonable, there are factors that
are hard to predict and influenced by economic and other conditions
that are beyond the Company's control. Among the other important
factors which could cause actual results to differ materially from
those in the forward-looking statements are potential changes in
the terms of the proposed amended plan of reorganization, the
failure of the Company's Board of Directors to approve such terms,
the failure of the Company to file an amended plan of
reorganization, the failure of the Bankruptcy Court to confirm the
amended plan, or the failure of the amended plan to otherwise
become effective, as well as other factors detailed in Seitel's
filings with the Securities and Exchange Commission, including its
most recent Form 10-K Annual Report, a copy of which may be
obtained from the Company without charge. DATASOURCE: Seitel, Inc.
CONTACT: Seitel, Inc., +1-713-881-8900 Web site:
http://www.seitel-inc.com/
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