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PGS ASA (0MHR.L)

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  • Globe Newswire

    PGS ASA: Binding Agreements with Majority of Lenders

    October 21, 2020: Oslo, Norway, PGS ASA (the “Company” or “PGS”) has, further to its announcement on September 25, 2020, regarding its agreement in principle on main terms with its lenders, now entered into a lock-up agreement (the “Lock-Up Agreement”) with lenders representing, in aggregate, 79.6% of its ~$350 million revolving credit facility (“RCF”) and ~$522 million term loan B facility (“TLB”). PGS has also entered into a consent and amendment agreement (the “Consent and Amendment Agreement”) with the representative of 100% of the finance parties under its ~$300 million export credit facilities (“ECF”). Overview of the Transactions As previously announced, the agreed terms of these transactions (the “Transactions”) will, once consummated, enable PGS to extend its current near-term maturity and amortization profile under its RCF/TLB and ECF facilities by approximately two years. Together with the cost saving initiatives previously announced, the Transactions will strengthen PGS’s liquidity profile in the currently challenging operating environment.  The main terms agreed pursuant to the Lock-Up Agreement and the Consent and Amendment Agreement are as follows: The $135 million RCF due 2020, the $215 million RCF due 2023 and the ~$2 million TLB due 2021 will each be converted into a new TLB on the same terms as the ~$520 million 2024 TLBQuarterly amortization payments of up to 5% per annum of the original principal amount of the ~$520 million 2024 TLB will be replaced by the new amortization payments described belowThe post transaction total debt under these credit facilities of ~$872 million (subject to any increases in principal due to payment-in-kind fees and any reduction in principal due to lenders electing to exchange part of their existing debt into new convertible bonds; see further below) maturing in March 2024 will have following amortization profile (payable pro-rata to all TLB lenders): ~$135 million amortization payment due in September 2022$200 million amortization payment due in September 2023~$9 million quarterly amortization starting March 2023 Quarterly amortization payments totalling ~$106 million due over the next two years under the ECF will be deferred and repaid over four quarters starting December 2022The current excess cash flow sweep for the RCF/TLB facilities will be replaced by an excess liquidity sweep for any liquidity reserve in excess of $200 million at each quarter end, with such amounts to be applied against (i) the deferred amortization amounts under the ECF and (ii) the ~$135 million TLB amortization, until they have both been paid in full; thereafter, any liquidity reserve in excess of $175 million at each quarter end will be applied against the remaining TLB amortizationsThe financial maintenance covenants will be amended, with the net leverage ratio to be 4.5x through June 30, 2021, 4.25x through December 31, 2021, 3.25x through December 31, 2022 and 2.75x thereafterThe lenders’ security package will be strengthenedTotal fees across the lender groups of up to ~$7.6 million will be payable in cash and up to ~$9.9 million will be payable in kindAn up to ~NOK 116.2 million 3-year 5% unsecured convertible bond (the “CB”) which can be converted into new PGS shares at NOK 3 per share (up to a maximum of 38,720,699 shares, equalling 10% of the currently outstanding PGS shares) will be issued by PGS. 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 their existing secured loans. To the extent the CB is not fully subscribed, certain lenders under the TLB will (i) subscribe for 80% of the unallocated amount for cash and (ii) have the right to subscribe for the remaining 20% of 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 for 30 consecutive trading days Support for the Transactions/Implementation The representative of all of the ECF financing parties has entered into the Consent and Amendment Agreement which (i) provides for the proposed amendments to the ECF and (ii) maintains the forbearance arrangements (including restrictions on acceleration and enforcement action) (the “Forbearance”) as put in place with the ECF following the previous market announcement on September 25, 2020. The non-amendment terms of the Consent and Amendment Agreement are effective immediately and are subject to customary termination events.  The amendment terms will become effective upon the consummation of the Transactions. The Lock-Up Agreement has been entered into by RCF and TLB lenders representing in aggregate 79.6% by amount and 65.3% by number, including: An informal Ad-Hoc Committee of TLB lenders and certain other TLB lenders representing 78.9% of the ~$522 million TLB facilities100% of the $215 million 2023 RCF50.4% of the $135 million 2020 RCF The Lock-Up Agreement outlines the terms of the proposed amendments to the RCF/TLB Credit Agreement. Under the terms of the Lock-Up Agreement, the lenders have agreed, among other things, to take such steps as are required to support the implementation and the consummation of the Transactions. The Lock-Up Agreement also maintains the terms of the Forbearance arrangement as put in place with the majority of the RCF and TLB lenders prior to the previous market announcement on September 25, 2020. The terms of the Lock-Up Agreement are effective immediately and subject to customary undertakings and termination events. Following this announcement, the Company will launch a request for support from TLB lenders who have not yet seen the details of the Transactions and from RCF lenders who have not yet signed the Lock-Up Agreement. Unless 100% of the RCF and TLB lenders consent to the Transactions, the amendments to the RCF and TLB will be implemented pursuant to an English law scheme of arrangement upon approval of the English Court, after obtaining the necessary majority creditor consent (being 75% by value and a majority in number of the total RCF and TLB voting in the Scheme) (the “Scheme”). The Scheme will enable the Transaction in respect of the RCF and TLB to be implemented and bind all RCF and TLB lenders (including those who vote against or do not vote). To date, lenders holding a sufficient amount of RCF and TLB debt to meet the relevant Scheme approval levels have already signed the Lock-up Agreement. The governing law of the RCF and TLB has been changed to English law in furtherance of the Scheme. The agreed amendments to the RCF, TLB and ECF facilities are inter-conditional and subject to customary conditions precedent and subsequent. They remain subject to the implementation processes described above. If implemented consensually (assuming 100% consent from the RCF and TLB lenders), the Transactions are expected to close during Q4 2020. If implemented through the Scheme, it is anticipated that the Transactions will close during the course of Q1 2021. Further details on implementation will be announced in due course. Further information on the Transactions, as well as the summary financial information shared with Ad-Hoc Committee of TLB lenders and certain other TLB lenders, can be found in the presentation titled Cleansing Presentation on the Company’s website www.pgs.com – Investors – Presentations. The Company will continue to operate its business as usual by performing other obligations, including making payments of interest, as they fall due. The Company will provide updates in due course as appropriate.   FOR DETAILS, CONTACT:  BÅRD STENBERG, VP IR & CORPORATE COMMUNICATION MOBILE:  +47 99 24 52 35   *** PGS 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. *** 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. --END--

  • Globe Newswire

    PGS ASA: Q3 2020 Update

    October 9, 2020: Oslo, Norway, based on a preliminary review, PGS expects to report Segment* revenues for Q3 2020 of approximately $115 million. Contract revenues ended at approximately $9 million. MultiClient pre-funding revenues were approximately $52 million, from a capitalized MultiClient cash investment of approximately $57 million. MultiClient late sales were approximately $26 million. Q3 2020 revenues include approximately $23 million of government grants related to the Covid-19 pandemic. The government grants are recorded as Other revenues. “A majority of our active vessel capacity was allocated to MultiClient in Q3. The market remains challenging, but we believe this quarter represents the trough of this Covid-19 driven downturn. We expect increasing revenues from vessel operations and MultiClient sales going forward.   During the quarter, we completed our reorganization to adapt to the challenging market environment. We are now down to an annual run rate gross cash cost of approximately $400 million, assuming five vessels in operation. The process to complete documentation with lenders on the agreement to extend maturities is progressing according to plan”, says President & CEO Rune Olav Pedersen. PGS routinely releases information about 3D vessel utilization after the end of each quarter. Summary of vessel utilization:   Approximate allocation of PGS operated 3D towed streamer capacity   Quarter endedSeptember 30,Quarter ended June 30, 202020192020Contract seismic2%32%15%MultiClient seismic69%  56%50%Steaming11%12%21%Yard7%0%0%Stacked/Standby11%0%14%             The Q3 2020 vessel statistics includes five vessels. All cold-stacked** vessels are excluded from the statistics. The comparative periods (Q3 2019 and Q2 2020) are based on eight vessels. The Company provides this information based on a preliminary summary of Q3 2020 revenues. The Company has not completed its financial reporting and related consolidation, review and control procedures, including the final review of all sales against the established revenue recognition/cut-off criteria. The estimates provided in this release are therefore subject to change and the Q3 2020 financial statements finally approved and released by the Company may deviate from the information herein. PGS will release its Q3 2020 financial statements on Thursday October 22, 2020, at approximately 8:00am Central European Summer Time (CEST). A corresponding presentation is scheduled for 09:00am CEST the same day. *For the purpose of Segment reporting, MultiClient prefunding revenues are recognized on a percentage of completion basis, and the related amortization of MultiClient library is based upon the ratio of aggregate capitalized survey costs to forecasted sales. This differs from IFRS reporting which recognizes revenue from MultiClient prefunding agreements and related amortization at the “point in time” when the customer receives access to, or delivery of, the finished data. For further description of the principles applied, see details in the 2019 annual report. **The term "cold-stacked" is used when a vessel is taken out of operation for an extended period of time. Costs are reduced to a minimum, with the vessel preserved for a long idle time, all or most in-sea seismic equipment removed from the vessel, and typically the Company does not have available crew to operate the vessel.            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 a focused marine geophysical company that provides a broad range of seismic and reservoir services, including acquisition, imaging, interpretation, and field evaluation. The Company MultiClient data library is among the largest in the seismic industry, with modern 3D coverage in all significant offshore hydrocarbon provinces of the world. 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. *** 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. --END--

  • Globe Newswire

    PGS ASA: Agreement in Principle with Lenders on Main Terms

    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 daysThe 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.***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.\--END--