Geokinetics Confirms Reorganization Plan, Secures Financing
Geokinetics announced that the U.S. Bankruptcy Court for the District of Delaware confirmed the second modified joint plan of reorganization of the company and its domestic subsidiaries under Chapter 11 of the Bankruptcy Code. The company expects to emerge from Chapter 11 in early May 2013 after the conditions to effectiveness of the plan are satisfied.
The plan, which was overwhelmingly approved by the company’s stakeholders in connection with its pre-packaged solicitation of votes, provides for the payment in full of the company’s $50 million secured credit facility, the conversion of the $300 million (plus accrued and unpaid interest) of the company’s senior secured notes into newly issued common equity of the reorganized company and the payment of allowed general unsecured claims in full either at the conclusion of the Chapter 11 case or in the ordinary course of business. The outstanding borrowings under the company’s debtor-in-possession credit facility will be repaid with shares of new common stock at a discount to plan value, as provided in the plan.
In connection with its emergence from Chapter 11, the company has received a commitment from Wells Fargo Bank for a $75 million senior secured asset-based revolving credit facility. Borrowings under the credit facility will be subject to satisfaction of customary conditions precedent and a borrowing base limitation based on the percentage values of eligible accounts, equipment and the company’s multi-client data library (subject in certain instances to dollar caps). The proceeds of the borrowings will initially be used to make certain of the distributions as provided in the plan and may be used for working capital and other corporate purposes, including capital expenditures. The terms of the credit facility are still being negotiated. The execution and delivery of definitive documents is a condition precedent to the effectiveness of the plan.
David J. Crowley, president and chief executive officer of the company, said, “The confirmation of our plan of reorganization represents the last major milestone prior to completing our restructuring. We are extremely proud of what we have accomplished in partnership with our stakeholders. I would like to thank our customers and vendors for their support throughout this process as well as our employees for their ongoing commitment to Geokinetics.”
Geokinetics is a provider of seismic data acquisition, seismic data processing services and multi-client seismic data to the oil and gas industry worldwide.