Petroleum Geo-Services ASA: ANNOUNCES OFFER TO EXCHANGE ANY AND ALL OF ITS 7.375% SENIOR NOTES DUE 2018 FOR A COMBINATION OF NEW 7.375% SENIOR NOTES DUE 2020 AND CASH
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, HONG KONG OR JAPAN,
OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL OR WOULD REQUIRE REGISTRATION OR OTHER MEASURES. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED
HEREIN.
FOR IMMEDIATE RELEASE
For additional information, please contact:
Bård Stenberg
VP IR & Corporate Communications
+47 67 51 43 16
Petroleum Geo-Services ASA Announces Offer to Exchange
ANY AND ALL OF its 7.375% Senior Notes due 2018 FOR A COMBINATION OF
NeW 7.375% Senior Notes due 2020 AND CASH
Oslo, Norway, November 22, 2016 - Petroleum Geo-Services ASA (Oslo Stock
Exchange: PGS) ("PGS" or the "Company") today announced that it has commenced an
offer to exchange (the "Exchange Offer") any and all of its outstanding 7.375%
Senior Notes due 2018 (the "Old Notes") for total exchange consideration per
$1,000 principal amount of Old Notes comprising (i) $500 aggregate principal
amount of new 7.375% Senior Notes due 2020 to be issued by the Company (the "New
Notes") plus (ii) $475 in cash, as set forth in the table below.
Outstanding
Old Notes to Principal CUSIP Numbers Exchange Consent Total Exchange
be Exchanged Amount and ISINs Consideration((1)) Payment((1)) Consideration((1)(2))
7.375% $450,000,000 144A: 716599AC9 $500 principal $30 in cash $500 principal amount
Senior Notes / US716599AC95 amount of of
due 2018 New Notes and New Notes and $475 in
Reg S: R69628AA4 $445 in cash cash
/ USR69628AA46
____________________
(1) For each $1,000 principal amount of Old Notes.
(2) Includes the Consent Payment payable to eligible holders whose Old Notes
are validly tendered and not validly withdrawn and as to which Consents to the
Proposed Amendments are delivered on or prior to the Early Tender Date (as each
such term is defined below).
The Exchange Offer is being made pursuant to the Exchange Offer and Consent
Solicitation Memorandum dated November 22, 2016 (the "Exchange Offer
Memorandum"). The Exchange Offer is scheduled to expire at 11:59 p.m., New York
City time, on December 20, 2016, unless extended by the Company (such time and
date, as the same may be extended, the "Expiration Date"). Eligible holders (as
defined in the Exchange Offer Memorandum) who validly tender and do not validly
withdraw their Old Notes by 11:59 p.m., New York City time, on December
6, 2016, unless extended by the Company (such date and time, as the same may be
extended, the "Early Tender Date"), will be eligible to receive the total
exchange consideration set forth in the table above. Eligible holders who
validly tender and do not validly withdraw their Old Notes after the Early
Tender Date but on or prior to the Expiration Date will be eligible to receive
the Exchange Consideration set forth in the table above. Eligible holders may
only withdraw their tendered Old Notes prior to 11:59 p.m., New York City time,
on December 6, 2016, unless extended or earlier terminated (the "Withdrawal
Deadline").
Eligible holders whose Old Notes are accepted for exchange in the Exchange Offer
will also receive accrued and unpaid interest in cash in respect of such
exchanged Old Notes from the last interest payment date to, but not including,
the date of settlement pursuant to the terms described in the Exchange Offer
Memorandum.
Concurrently with the Exchange Offer, the Company is soliciting consents (the
"Consents") to certain proposed amendments (the "Proposed Amendments") to the
indenture governing the Old Notes (the "Old Notes Indenture") on the terms and
conditions set forth in the Exchange Offer Memorandum (the "Consent
Solicitation"). The Proposed Amendments will eliminate substantially all of the
restrictive covenants, all of the reporting covenants and certain of the events
of default in the Old Notes Indenture, if adopted. In order to effect the
Proposed Amendments, Consents must be received from holders representing not
less than a majority in aggregate principal amount of the outstanding Old Notes
(as determined in accordance with the Old Notes Indenture). Eligible holders who
validly tender their Old Notes will be deemed to have consented to the Proposed
Amendments. Eligible holders may not tender their Old Notes in the Exchange
Offer without delivering Consents to the Proposed Amendments and may not deliver
Consents to the Proposed Amendments without tendering their Old Notes in the
Exchange Offer.
The consummation of the Exchange Offer is subject to satisfaction or waiver of
certain conditions, including, among others, (a) the closing of the concurrent
private placement of new shares on terms and conditions satisfactory to the
Company in its sole discretion, (b) the effectiveness of certain proposed
amendments to the Company's existing revolving credit facility as described in
the Exchange Offer Memorandum and (c) the receipt of valid tenders of Old Notes,
not withdrawn, and Consents, not revoked, of not less than 90% of the aggregate
principal amount of outstanding Old Notes in the Exchange Offer. The private
placement of new shares is subject to customary conditions, including approval
thereof by an extraordinary general meeting of the Company, which is currently
expected to be held in approximately three weeks and the receipt of valid tender
of Old Notes of not less than 90% of the aggregate principal amount of
outstanding Old Notes in the Exchange Offer. Prior to launching the Exchange
Offer, the Company received commitments from eligible holders representing
$251,660,000, or approximately 55.9%, of the aggregate principal amount of
outstanding Old Notes to tender their Old Notes in the Exchange Offer.
The Company reserves the right, subject to applicable law and the terms set
forth in the Exchange Offer Memorandum, to (i) extend the Early Tender Date, the
Expiration Date or the Withdrawal Deadline, (ii) modify, extend or terminate the
Exchange Offer and/or the Consent Solicitation or (iii) otherwise amend the
Exchange Offer and/or the Consent Solicitation in any respect. In addition, the
Company may, in its sole discretion, waive certain conditions to the Exchange
Offer.
Background and Rationale
To maintain a robust financial position through the ongoing uncertainty, PGS has
established a financial plan which seeks to strengthen its liquidity position
even further by proactively addressing the December 2018 maturity of the Old
Notes, de-leveraging the balance sheet and reducing interest costs. In November
2016, PGS successfully completed the first step of its financial plan through
the extension of maturity of the existing revolving credit facility to September
18, 2020 and reduced the commitments thereunder to $400 million upon the
effectiveness of the RCF Amendments and to $350 million from September 18, 2018
through the execution of an amendment agreement and extension request, each to
be entered into in connection with the Exchange Offer. As a second step, PGS is
seeking to address the 2018 maturity of the Old Notes through the Exchange
Offer, the cash consideration for which will be financed from a portion of the
proceeds raised in the concurrent private placement of new shares in the
Company. The Exchange Offer is conditional upon the closing of the private
placement.
Indicative Timetable
+--------------------+---------------------------------------------------------+
|Date |Calendar Date |
+--------------------+---------------------------------------------------------+
|Commencement Date |November 22, 2016 |
+--------------------+---------------------------------------------------------+
|Early Tender Date |11:59 p.m., New York City time, on December 6, 2016, |
| |unless extended. |
+--------------------+---------------------------------------------------------+
|Withdrawal Deadline |11:59 p.m., New York City time, on December 6, 2016, |
| |unless extended or earlier terminated. |
+--------------------+---------------------------------------------------------+
|Expiration Date |11:59 p.m., New York City time, on December 20, 2016, |
| |unless extended. |
+--------------------+---------------------------------------------------------+
|Settlement Date |Three business days after the Expiration Date, unless|
| |extended, assuming all conditions to the Exchange Offer|
| |have been satisfied or waived, currently expected to be|
| |December 23, 2016. |
+--------------------+---------------------------------------------------------+
The complete terms and conditions of the Exchange Offer and the Consent
Solicitation are described in the Exchange Offer Memorandum, copies of which may
be obtained by eligible holders by contacting Lucid Issuer Services Limited, the
information agent for the Exchange Offer, at Tankerton Works, 12 Argyle Walk,
London WC1H 8HA, United Kingdom or +44 (0)20 7704 0880 or pgs@lucid-is.com.
The Company has retained Arctic Securities AS, Barclays Bank PLC and J.P. Morgan
Securities LLC as Lead Dealer Managers and ABN AMRO Securities (USA) LLC, DNB
Markets, a part of DNB Bank ASA, Nordea Bank Danmark A/S and The Royal Bank of
Scotland plc as Co-Managers for the Exchange Offer. Any questions concerning the
terms and conditions of the Exchange Offer should be directed to the Lead Dealer
Managers: Arctic Securities AS (Europe: +47 21 01 31 00; US: +1 (212)
597 5555; arctic.credit.sales@arctic.com), Barclays Bank PLC (Europe: +44 (0)
20 3134 8515; US: +1 (212) 528-7581; US Toll Free: +1 (800) 438-3242;
liability.management@barclays.com) and J.P. Morgan Securities LLC (Europe: +44
(0) 20 7134 2468; US Toll Free: + 1 (866) 834-4666; emea_lm@jpmorgan.com).
The New Notes have not been, and will not be, registered under the
U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or the
securities laws of any other jurisdiction and may not be offered or sold,
directly or indirectly, in the United States, absent registration under or an
exemption from, or in a transaction not subject to, the registration
requirements of, the U.S. Securities Act. No public offering of the New Notes is
being made in the United States or in any other jurisdiction. Accordingly, the
Exchange Offer is only being made to, and Consents are only being solicited
from, registered holders of Old Notes who are (i) "qualified institutional
buyers" within the meaning of Rule 144A under the U.S. Securities Act and (ii)
persons other than "U.S. persons" who are located outside the United States, as
those terms are defined in Rule 902 of Regulation S under the U.S. Securities
Act, and, if such holders are located in the European Economic Area, Qualified
Investors (as such term is defined under Directive 2003/71/EC (as amended))
(collectively, the "eligible holders"). Only eligible holders of Old Notes who
certify to the foregoing will be authorized to receive and review the Exchange
Offer Memorandum and to participate in the Exchange Offer and the Consent
Solicitation.
Arctic Securities AS, Barclays Bank PLC, J.P. Morgan Securities LLC, ABN AMRO
Securities (USA) LLC, DNB Markets, a part of DNB Bank ASA, Nordea Bank Danmark
A/S and The Royal Bank of Scotland plc (together, the "Dealer Managers") are
each acting exclusively for the Company and for no-one else in connection with
any transaction mentioned in this announcement and will not regard any other
person (whether or not a recipient of this announcement) as a client in relation
to any such transaction and will not be responsible to any other person for
providing the protections afforded to their respective clients, or for advising
any such person on the contents of this announcement or in connection with any
transaction referred to in this announcement. The contents of this announcement
have not been verified by the Dealer Managers.
This announcement is for informational purposes only and does not constitute an
offer to sell or a solicitation of an offer to buy the New Notes nor an offer to
purchase Old Notes or a solicitation of Consents in the United States or any
jurisdiction. The Exchange Offer is being made solely by, and pursuant to, the
terms set forth in the Exchange Offer Memorandum. The Exchange Offer is not
being made to persons in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or other laws
of such jurisdiction.
Forward-Looking Statements
This release contains certain forward-looking statements regarding the future
events or the future financial performance of PGS. These statements reflect
management's current views with respect to future events or financial
performance, and are based on management's current assumptions
and information currently available and are not guarantees of the Company's
future performance. The timing of certain events and actual results could differ
materially from those projected or contemplated by the forward-looking
statements due to a number of factors including, but not limited to those
inherent to operating in a highly regulated industry, strong competition,
commercial and financial execution, economic conditions, among others.
About PGS
PGS is a leading marine seismic survey and data processing company operating in
all of the major oil and natural gas offshore basins worldwide.
PGS' ordinary shares trade on the Oslo Stock Exchange under the symbol 'PGS'.
This information is subject to the disclosure requirements pursuant to section
5 -12 of the Norwegian Securities Trading Act.