SAEXPLORATION HOLDINGS, INC. Item 1.03 Bankruptcy or Receivership.
As previously reported by
On
The Debtors expect that the effective date of the Plan will occur as soon as all
conditions precedent to the Plan have been satisfied (defined in the Plan as the
"Effective Date"). Although the Debtors are targeting the occurrence of the
Effective Date on or before
The following is a summary of the material terms of the Plan. The summary highlights only certain substantive provisions of the Plan and is not intended to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Plan and Confirmation Order, which are attached hereto as Exhibits 2.1 and 99.1, respectively, and incorporated herein by reference.
The Plan of Reorganization and Treatment of Claims and Interests
The Plan provides that, among other things, on the Effective Date:
• The Company's existing (i) common stock, (ii) Series A Warrants, Series B
Warrants, Series C Warrants, Series D Warrants, Series E Warrants and
Series F Warrants to purchase common stock of the Company and (iii) right
to receive additional Series A Warrants, Series B Warrants, Series C
Warrants, Series D Warrants, Series E Warrants and Series F Warrants to
purchase common stock of the Company (collectively, the "Company
Interests") will be extinguished, and holders of Company Interests will
not receive or retain any distribution, property or other value on
account of or consideration in respect of their Company Interests.
• Holders of allowed priority claims (other than a secured tax claim or an
administrative claim) will receive either: (i) payment in full, in cash,
of the unpaid portion of such claim or (ii) such other treatment as may
otherwise be agreed to by such holder, the Debtors, and the Requisite
Creditors (as defined in the Plan).
• Holders of secured claims (other than secured tax claims, Credit
Agreement Claims, Term Loan Claims or Convertible Notes Claims) will
receive, at the Debtors' election with the consent of the Requisite
Creditors, either: (i) cash equal to the full allowed amount of such
claim, (ii) reinstatement of such holder's claim, or (iii) the return or
abandonment of the collateral securing such claim to such holder.
• Holders of secured tax claims will receive, at the Debtor's election with
the consent of the Requisite Creditors, either (i) cash equal to the full
allowed amount of its claim, (ii) reinstatement of such holder's secured
tax claim, or (iii) the return or abandonment of the collateral securing
such claim to such holder.
• Holders of claims (the "Credit Agreement Claims") arising on account of
the Third Amended and Restated Credit and Security Agreement, dated as of
September 26, 2018 (as amended from time to time), among SAExploration
Inc. , the guarantors party thereto, Cantor Fitzgerald Securities , as
administrative agent and collateral agent, and the lenders party thereto
will be allowed in the aggregate principal amount of $20,500,000.00 , plus
any accrued and unpaid interest thereon ("Accrued Interest"). Each holder
of a Credit Agreement Claim will receive (i) its pro rata share (measured
by reference to the aggregate amount of Credit Agreement Claims) of
participation in the Second Lien Exit Facility (as defined in the Plan)
in an amount equal to such allowed Credit Agreement Claim, (ii) the right
to purchase pursuant to the Rights Offering (as defined in the Plan) up
to its pro rata share (measured by reference to the aggregate amount of
Credit Agreement Claims and the aggregate amount of Term Loan Claims) of
(A) the term loans under the First Lien Exit Facility (as defined in the
Plan) and (B) the New First Lien Exit Facility Equity (as defined in the
Plan), and (iii) the payment in full in cash on the Effective Date of all
Accrued Interest as of the Effective Date.
• Holders of claims (the "Term Loan Claims") arising on account of the Term
Loan and Security Agreement, dated as of June 29, 2016 (as amended from
time to time), among the Company, the guarantors party thereto, Delaware
Trust Company , as administrative agent and collateral agent, and the
lenders party thereto, will be allowed in the aggregate principal amount
of $29,000,000 plus accrued and unpaid interest thereon, fees, expenses
and other obligations relating to such claims payable through the
Petition Date. Each holder of a Term Loan Claim will receive (i) its pro
rata share (measured by reference to the aggregate amount of Term Loan
Claims) of 100% of the common stock in the reorganized company (the "New
Equity") under the Plan, subject to dilution by (A) the New First Lien
Exit Facility Equity, (B) New Equity issued pursuant to the First
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Lien Exit Facility Put Option Premium (as defined in the Plan) and
(C) awards related to New Equity issued under the post-Effective Date
management incentive plan, and (ii) the right to purchase pursuant to the
Rights Offering up to its pro rata share (measured by reference to the
aggregate amount of Term Loan Claims and the aggregate amount of Credit
Agreement Claims) of (A) the term loans under the First Lien Exit
Facility and (B) the New First Lien Exit Facility Equity.
• Claims (the "Convertible Notes Claims") arising on account of the
Company's 6.00% Senior Secured Convertible Notes due 2023 will be
discharged, cancelled, released and extinguished, and will be of no
further force or effect. No distribution will be made on account of any
Convertible Notes Claims.
• Claims (the "PPP Loan Claims") relating to the unsecured note dated as of
May 8, 2020 , between SAExploration Inc. and Texas Champions Bank will be
reinstated.
• Holders of general unsecured claims will be discharged, cancelled,
released and extinguished, and will be of no further force or effect. No
distribution will be made on account of any general unsecured claims.
• Any claim against a Debtor pursuant to section 510(b) of the Bankruptcy
Code (a "Section 510(b) Claim") will be discharged, canceled, released,
and extinguished and will be of no further force or effect, and holders
of Section 510(b) Claims will not receive any distribution on account of
such Section 510(b) Claims.
• Intercompany claims will be reinstated or, at the Reorganized Debtors'
(as defined in the Plan) option, cancelled. No distribution will be made
on account of any intercompany claims other than in the ordinary course
of business of the Reorganized Debtors, as applicable.
• Intercompany interests will be reinstated or, at the Reorganized Debtors'
option, cancelled. No distribution will be made on account of any
intercompany interests.
Unless otherwise specified, the treatment set forth in the Plan and Confirmation Order will be in full satisfaction of all claims against and interests in the Debtors, which will be discharged on the Effective Date.
Additional information regarding the classification and treatment of claims and interests can be found in Article III of the Plan.
Capital Structure
Pursuant to the Plan, the Company Interests outstanding immediately before the
Effective Date will be cancelled and of no further force or effect after the
Effective Date. As of
Settlement, Releases and Exculpations
The Plan incorporates an integrated compromise and settlement of claims. Unless otherwise specified, the settlement, distributions, and other benefits provided under the Plan, including the discharge, release exculpation, and injunction provisions included therein, are in full satisfaction of all claims and causes of action that could be asserted.
The Plan provides discharge, release, exculpation, and injunction provisions for the benefit of the Debtors, certain of the Debtors' claimholders, other parties in interest and various parties related thereto, each in their capacity as such, from various claims and causes of action, as further set forth in Article VIII of the Plan.
Certain Information Regarding Assets and Liabilities of the Company
Information regarding the assets and liabilities of the Company as of the most
recent practicable date is hereby incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the period ended
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the meaning Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this Current Report on Form 8-K are forward looking statements. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected.
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Among those risks, trends and uncertainties are: (i) the Company's ability to
obtain Court approval with respect to motions or other requests made to the
Court in the Chapter 11 Cases, including maintaining strategic control
as debtor-in-possession; (ii) the ability of the Company and its subsidiaries to
consummate the Plan; (iii) the effects of the Company's bankruptcy filing on the
Company and on the interests of various constituents; (iv) Court rulings in the
Chapter 11 Cases in general; (v) the length of time that the Company will
operate under Chapter 11 protection and the continued availability of operating
capital during the pendency of the proceedings; (vi) risks associated with third
party motions in the Chapter 11 Cases, which may interfere with the Company's
ability to consummate the Plan; (vii) the potential adverse effects of the
Chapter 11 proceedings on the Company's liquidity or results of operations;
(viii) increased advisory costs to execute the Company's reorganization;
(ix) the impact on the Company's ability to access the public capital markets;
and (x) other factors disclosed by the Company from time to time in its filings
with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1 Debtors' Second Amended Chapter 11 Plan of Reorganization, as
modified on December 8, 2020 (incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K filed with the SEC on
December 9, 2020 )
99.1 Ordering Confirming Chapter 11 Plan of Reorganization for
SAExploration Holdings, Inc. and Its Debtor Affiliates
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