September 25, 2020: Oslo, Norway, PGS ASA (the "Company" or "PGS") has reached
an important milestone in the previously reported discussions with its lenders.
The Company has come to an agreement in principle on main terms with the
negotiation teams of the finance parties under its ~$300 million export credit
facilities ("ECF"), and a majority of the lenders under its $350 million
revolving credit facility ("RCF") and ~$520 million term loan B facility
("TLB").
The agreement in principle remains subject to lenders' internal approvals and
agreement on final documentation. Subject to the successful completion of these
processes in the next few weeks, it is anticipated that the Company will
initiate an amendment request to all TLB lenders not yet engaged in the
negotiations to approve and implement final agreements. To date, the Company
has reached agreement in principle on main terms with; an Ad Hoc Group of TLB
lenders representing 62% of its ~$520 million TLB facility; lenders representing
81% of its $350 million RCF; and all of the ECF financing parties. The Board of
directors of PGS has approved the transaction conditional only upon the lenders'
internal approvals and agreement on final documentation.
The main terms agreed include:
* No debt maturities and no scheduled debt amortization until September 2022
which will be the new maturity of an amount of $135 million equivalent to
the RCF amount maturing today
* The $215 million RCF due 2023 will be combined on equivalent terms with the
TLB due 2024, with the combined TLB having a $200 million amortization in
September 2023 in lieu of the current 2023 RCF maturity
* An excess liquidity sweep that will apply for any liquidity reserve in
excess of $200 million at any quarter-end
* An amendment of the financial maintenance covenants, with the net leverage
ratio at 4.5x through 30 June 2021 and a gradual step down thereafter
* Customary fees to be paid partly in cash and partly in kind
* The issuance of a NOK 116.2M 3-year 5% unsecured convertible bond ("CB"")
which can be converted into new shares at NOK 3 per share up to a maximum of
38,720,699 shares (equalling 10% of the currently outstanding PGS shares).
Lenders under the RCF and TLB facilities will have a pro rata preferential
right to subscribe for the CB against conversion of a corresponding amount
of existing loans. To the extent the CB is not fully subscribed, a subset of
the lenders under the TLB will subscribe for the unallocated amount for
cash. PGS will be able to require that bondholders convert the CB into
shares if the PGS share price exceeds NOK 6 during 30 consecutive trading
days
The majority of lenders under the $135 million tranche of the Company's RCF,
which is due later today, have agreed to the main terms. As part of the
agreement with the majority of the lenders under the Company's RCF and TLB, the
Company will not repay any part of the $135 million due today. The non-payment
of principal of such facility today is an event of default under the RCF and
TLB. A required majority of lenders under the RCF and TLB facilities have
entered into a forbearance agreement undertaking not to take any enforcement
action in connection with this on-going default. The Company is in dialogue
with the ECF financing parties to obtain the same forbearance prior to any
cross-default arising under the ECF agreement.
The Company will continue working to achieve support from the required lenders
under the RCF and TLB. However, if such support is not ultimately achieved, the
Company has agreed with the supporting lenders under the RCF and TLB to seek
implementation by use of available alternative legal restructuring procedures.
The Company will continue to operate its business as usual by performing other
obligations, including payment of interest, as they fall due.
The Company will provide updates as further milestones are reached.
FOR DETAILS, CONTACT:
Bård Stenberg, VP IR & Corporate Communication
Mobile: +47 99 24 52 35
***
PGS ASA and its subsidiaries ("PGS" or "the Company") is an integrated marine
geophysical company, providing advanced subsurface images, plus 2D and 3D data,
that energy companies use to find and produce oil and gas. PGS MultiClient data
library is among the largest in the seismic industry, with modern 3D coverage in
all significant offshore hydrocarbon provinces worldwide. The Company operates
on a worldwide basis with headquarters in Oslo, Norway and the PGS share is
listed on the Oslo stock exchange (OSE: PGS). For more information on PGS visit
www.pgs.com (http://www.pgs.com/).
***
The information included herein contains certain forward-looking statements that
address activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future. These statements are
based on various assumptions made by the Company, which are beyond its control
and are subject to certain additional risks and uncertainties. The Company is
subject to a large number of risk factors including but not limited to the
demand for seismic services, the demand for data from our multi-client data
library, the attractiveness of our technology, unpredictable changes in
governmental regulations affecting our markets and extreme weather conditions.
For a further description of other relevant risk factors we refer to our Annual
Report for 2019. As a result of these and other risk factors, actual events and
our actual results may differ materially from those indicated in or implied by
such forward-looking statements. The reservation is also made that inaccuracies
or mistakes may occur in the information given above about current status of the
Company or its business. Any reliance on the information above is at the risk of
the reader, and PGS disclaims any and all liability in this respect.
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act.
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