ION Geophysical and certain affiliates, after evaluating a variety of strategic alternatives, filed for voluntary Chapter 11 relief in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, as it explores a value-maximizing transaction that will strengthen the company’s balance sheet and position ION for sustained future success. In connection with the Chapter 11 filing, ION entered into a restructuring support agreement (RSA) with the lenders under its credit agreement and holders of approximately 80% of its 2025 notes, whereby the parties agreed to support the company’s Chapter 11 plan of reorganization.
The company and the consenting creditors that are parties to the RSA have agreed to the terms of a comprehensive restructuring, including the plan premised on a debt-for-equity exchange paired with the potential sale of certain assets to one or more third parties or a sale of substantially all of its assets. Under the terms of the RSA, ION will continue its ongoing solicitation of interest from third parties in potential sale transactions involving the company designed to maximize the value of the company’s assets through an open and transparent process that enables interested buyers to submit bids for assets.
The company also secured $2.5 million in debtor-in-possession financing that, along with normal operating cash flows, should support operations during the process. Therefore, ION expects to continue delivering excellent service quality with little to no expected disruption to clients.
The company has filed a number of customary motions with the bankruptcy court seeking authority to continue operations in the ordinary course, including, but not limited to, paying employees and continuing existing benefit programs without interruption and meeting go-forward commitments to customers, suppliers, employees and other stakeholders. These motions are typical in the Chapter 11 process and ION anticipates that they will be heard and approved in the first few days of the Chapter 11 case.
ION is advised in this matter by Winston & Strawn, Perella Weinberg Partners and FTI Consulting.
