New York, NY — ION Geophysical Corporation (“ION” or the “Company”), an innovative, asset-light technology company that delivers powerful data-driven decision making to offshore energy, port, and defense industries, has completed a series of transactions resulting in a recapitalization of its balance sheet. FocalPoint Partners, LLC (“FocalPoint”) served as exclusive financial advisor to the majority bondholders.
Among these transactions was an exchange (“Exchange Offer”) of the Company’s 9.125% Senior Secured Second Priority Notes due December 2021 (“Existing Bonds”) for newly issued 8.00% Senior Secured Priority Notes due 2025 (the “New Notes”) and other considerations in the form of cash and common stock. Additionally, the Company also completed a rights offering (the “Rights Offering”) with its shareholders which raised over $40 million in the form of New Notes and common equity priced at $2.57 per share.
Approximately 94.1% of the bondholders participated in the Exchange Offer, representing a total principal amount of $113,472,000 of the $120,569,000 of Existing Bonds. The participating bondholders exchanged the Existing Bonds at an exchange price of 103.5% of par, for the following consideration: (i) $84,652,000 of aggregate principal in New Notes, (ii) 6,116,369 shares of the Company’s Common Stock, including 1,542,201 shares issued as the Early Participation Payment, and 4,574,168 shares issued as stock consideration in lieu of New Notes, and (iii) $20,659,722 paid in cash, including $3,595,250 of accrued and unpaid interest that became due on the Existing Bonds as part of the exchange. Pursuant to the Exchange Offer, post-closing, the Company will make an offer to participants to repurchase New Notes at par for up to 50% of Rights Offering proceeds in excess of $35 million raised concurrently with the Exchange Offer.
Bondholders have the right to convert all or any portion of the New Notes at any time prior to the maturity date at a $3.00 conversion price. In turn, the Company has the right to convert all or part of the outstanding New Notes on or after the 18-month anniversary of the issue date if the Company’s stock price exceeds 175% of the conversion price.
“We are extremely pleased with the outcome of the transactions, which strengthens our platform and supports our focus to grow and diversify the business,” said Chris Usher, ION’s President and Chief Executive Officer. “Not only does the exchange extend the maturity to 2025 with a lower coupon, but also provides a path to convert nearly all our debt to equity as we execute our strategy over the next couple years. On behalf of ION, I would like to sincerely thank all our stakeholders, as this transformation would not have been possible without their strong support and participation. We remain optimistic about promising growth opportunities to continue evolving our core business and diversifying into new markets associated with energy transition, sustainability, and digitalization.”
Managing Director Richard NeJame, member of FocalPoint’s Special Situations leadership team, commented, “This transaction represents the successful culmination of a long, complex process with many moving parts. The resulting capital structure will allow ION the unhindered pursuit of its operational and strategic objectives for the benefit of all stakeholders. We appreciated the opportunity to work with ION, its bondholders, and all the related professionals on this successful assignment.”
About ION Geophysical
Headquartered in Houston, Texas, ION leverages technologies to deliver powerful data-driven decision making to offshore energy and maritime operations markets, enabling clients to optimize investments and results through access to proprietary data, software and distinctive analytics. To learn more, visit iongeo.com.
About FocalPoint Partners
FocalPoint is an independent investment bank specializing in mergers and acquisitions, private placements (both debt and equity), financial restructurings, and special situation transactions. With offices in Los Angeles, Chicago, New York, and Shanghai, the firm provides global advisory services to middle market clients. For more information, visit focalpointllc.com and follow us on LinkedIn and Twitter.