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INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG OR JAPAN,
OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE
SECURITIES DESCRIBED HEREIN.
PGS ASA (“PGS” or the “Company”) is pleased to announce that it has received
commitments for a four-year term loan B (“TLB”) in a minimum principal amount of
USD 489 million and an extension of USD 215 million of its revolving credit
facility (“RCF”) by three years from its current expiry date in September 2020.
As part of the full refinancing of the Company’s debt maturing in the next 18
months, the Company contemplates a Private Placement (as defined below) for
gross proceeds of up to NOK 850 million (approximately USD 95 million).
The Refinancing
The refinancing (the “Refinancing”) will address upcoming maturities by:
- Extension of at least approximately 90% (USD 339 million) of the existing
USD 377 million TLB from the current maturity in March 2021 to March 2024
- USD 150 million of incremental TLB with same maturity and terms as the
extended TLB
- Extension of USD 215 million of the RCF to September 2023
- Approximately USD 95 million of new equity
The proceeds from the USD 150 million incremental TLB and the new equity will be
used to redeem the USD 212 million Senior Unsecured Notes (“SUN”) due December
2020, pay transaction fees and expenses and will otherwise be used for general
corporate purposes.
The Company has received TLB and RCF commitments of USD 489 million and USD 215
million respectively, subject to completion of an equity raise of at least USD
75 million and other customary closing conditions. The Refinancing is expected
to be completed concurrently with the closing of the Private Placement.
The terms and conditions of the TLB and RCF are summarized in a company
presentation made available on the Company’s website www.pgs.com. The TLB has a
floating interest at Libor + a basic margin grid of 600-700 basis points
depending on the Company’s leverage ratio, which corresponds to an interest rate
of 7.60-8.60% if current 4-year Swap interest rate is applied.
Update on Fourth Quarter and Full Year 2019 Financial Numbers
The Company’s fourth quarter and preliminary full year 2019 financial statements
are scheduled to be approved by the Board of Directors of PGS (the “Board”) on
29 January 2020, and released to the market on 30 January 2020. Due to the
proximity of the Private Placement to the scheduled release of the financial
statements the Company provides the below draft of the key financial numbers
table to be included in the financial statements.
The Company provides this information based on the current status of completing
its fourth quarter and full year 2019 financial statements. The Company has not
completed all its financial reporting and related consolidation, review and
control procedures. The estimates provided in this release are therefore subject
to change and the fourth quarter and preliminary full year 2019 financial
statements finally approved and released by the Company may deviate from the
information herein.
The information provided below includes certain alternative performance measures
(“APMs”). These APMs are consistent with those used in the Company’s annual and
quarterly financial statements and reference is made to the Company’s third
quarter 2019 financial statements for a definition of the APMs.
Key Financial Figures
(Unaudited) Quarter ended Year ended
December 31, December 31,
------------------- ------------------
(In millions of US
dollars, except per
share data) 2019 2018 2019 2018
Profit and loss numbers
Segment Reporting
Segment Revenues 288.4 245.2 880.1 834.5
Segment EBITDA 194.1 154.5 556.1 515.9
Segment EBIT ex.
impairment and other
charges, net 70.1 47.9 96.4 36.3
Profit and loss numbers
As Reported
Revenues 332.6 269.8 930.8 874.3
EBIT 54.2 26.3 54.6 39.4
Net financial items (25.7) (31.1) (92.2) (87.3)
Income (loss) before
income tax expense 28.5 (4.8) (37.6) (47.9)
Income tax expense (17.8) (18.7) (34.1) (40.0)
Net income (loss) to
equity holders 10.7 (23.5) (71.7) (87.9)
Basic earnings per
share ($ per share) 0.03 (0.07) (0.21) (0.26)
Other key numbers As
Reported by IFRS
Net cash provided by
operating activities 94.8 117.3 474.3 445.9
Cash investment in
MultiClient library 41.3 40.2 244.8 277.1
Capital expenditures
(whether paid or not) 17.7 16.1 59.1 42.5
Total assets 2,273.3 2,384.8 2,273.3 2,384.8
Cash and cash
equivalents 40.6 74.5 40.6 74.5
Net interest bearing
debt* 1,007.5 1,109.6 1,007.5 1,109.6
Net interest bearing debt, including
lease liabilities following IFRS 16* 1,204.6 1,204.6
*Following implementation of IFRS 16, prior periods are not comparable to
December 2019
Net financial items in the fourth quarter includes a share of loss from
associated companies of USD 6.4 million.
The net cash provided by operating activities for the fourth quarter 2019
reflects a revenue profile related increase of accounts receivable and accrued
revenues by USD 124.3 million, which will benefit first part of 2020.
The order book totaled USD 322 million at December 31, 2019 compared to USD 163
million at December 31, 2018.
The Private Placement
As part of the Refinancing, the Company is contemplating a private placement
(the “Private Placement”) of new ordinary shares (the “New Shares”) for gross
proceeds of up to NOK 850 million (approximately USD 95 million based on a
currency exchange rate of USD/NOK 8.9477). The net proceeds from the Private
Placement, together with the proceeds of the incremental TLB, will be used to
repay existing debt, and will otherwise be used for general corporate purposes.
The Private Placement is directed towards investors subject to, and in
compliance with, applicable exemptions from relevant prospectus or registration
requirements. PGS has retained Nordea Bank Abp, filial i Norge, J.P. Morgan
Securities PLC, Pareto Securities AS, ABN Amro Bank N.V., Barclays Bank PLC and
DNB Markets, a part of DNB Bank ASA as Joint Bookrunners in the Private
Placement (collectively, the “Managers”).
The subscription price for the New Shares (the “Subscription Price”) will be
determined by the Board based on an accelerated bookbuilding process. The
application period for the Private Placement will commence today, 21 January
2020 at 16:30 hours CET and is expected to close on 22 January 2020 at 08:00
hours CET. The Company, after consultation with the Managers, reserves the right
to at any time and in its sole discretion resolve to close or to extend the
application period or to cancel the Private Placement in its entirety without
further notice. The minimum order size and allocation in the Private Placement
will be the NOK equivalent of EUR 100,000, provided that PGS may, at its sole
discretion, offer and allocate an amount below EUR 100,000, pursuant to any
applicable exemptions from the prospectus requirement being available.
Allocation of the New Shares will be determined after the expiry of the book-
building process by the Board’s sole discretion, where the Board will focus
primarily on existing shareholding in the Company, but also take into account
other criteria such as (but not limited to) timeliness of the application, price
leadership, relative order size, sector knowledge, perceived investor quality
and investment horizon. The New Shares will be allocated by the Board on a
conditional basis subject to, inter alia, the Company’s shareholders resolving
to issue the New Shares at the EGM (as defined below). No guarantee can be given
that such resolution will be passed.
Completion of the Private Placement by delivery of New Shares to investors is
conditional upon, inter alia, (i) the Company raising a minimum of the NOK
equivalent of USD 75 million, (ii) the corporate resolutions of the Company
required to implement the Private Placement, including the approval by the
Company’s Board and an extraordinary general meeting in the Company (the “EGM”)
to be called for shortly after the conditional allocation in the Private
Placement to issue the Offer Shares (the “Conditions”). The EGM will be called
for shortly after the conditional allocation in the Private Placement and is
contemplated held on 13 February 2020. Investors being allocated shares in the
Private Placement and who hold shares in the Company as of the date of the EGM
undertake to vote in favour of the Private Placement and any Subsequent Offering
(as defined below) at the EGM. The Private Placement will be cancelled if the
mentioned Conditions are not fulfilled or waived.
The Company will announce the result of the Private Placement, the number of
shares allocated in the Private Placement and the Subscription Price in the
Private Placement through an announcement expected to be published before
opening of trading on Oslo Børs, tomorrow, 22 January 2020.
Settlement for the Private Placement is expected to occur on a delivery versus
payment basis. The shares delivered to the subscribers are thus expected to be
tradable upon delivery. The settlement date is expected to be shortly after the
EGM.
Subject to the pricing of the Private Placement, the Company has agreed to a
lock-up period, commencing on the date hereof and continuing until 90 days after
closing of the Private Placement, for issuance of, among other things, equity
securities, subject to customary exemptions (including the subsequent offering
referred to herein.
The contemplated Private Placement involves the setting aside of the
shareholders’ preferential rights to subscribe for the New Shares. The Board is
of the opinion that the Private Placement structure will be required to secure
the minimum equity raise condition to the completion of Refinancing, reduce
execution and completion risk, allow for the Company to raise capital more
quickly, raise capital at a lower discount compared to a rights issue and
without the underwriting commissions normally seen with rights offerings.
Furthermore, the Board has put much emphasis on allocation criteria for existing
shareholdings in the Company.
The Subsequent Offering
Subject to inter alia (i) completion of the Private Placement, (ii) relevant
corporate resolutions including approval by the Board and the EGM, (iii)
prevailing market price of PGS’ shares being higher than the Subscription Price,
and (iv) approval of a prospectus by the Norwegian Financial Supervisory
Authority (the “Prospectus”), PGS will consider to carry out a subsequent
offering (the “Subsequent Offering”) of new shares in the Company. A Subsequent
Offering will be, if made, and on the basis of the Prospectus, be directed
towards eligible shareholders in PGS who (i) are shareholders in the Company as
of the day of the expiry of the bookbuilding period for the Private Placement,
as registered as shareholders in PGS’ register of shareholders with the
Norwegian Central Securities Depositary (Nw. Verdipapirsentralen) (the “VPS”) as
of 23 January 2020, (ii) are not allocated New Shares in the Private Placement,
and (iii) are not resident in a jurisdiction where such offering would be
unlawful or, for jurisdictions other than Norway, would require any prospectus,
filing, registration or similar action (the “Eligible Shareholders”). The
Eligible Shareholders are expected to be granted non-tradable allocation rights.
The subscription period in the Subsequent Offering is expected to commence
shortly after publication of the Prospectus, expected in H1 2020, and the
subscription price in the Subsequent Offering will be the same as in the Private
Placement. PGS will issue a separate stock exchange notice with further details
on the Subsequent Offering if and when finally resolved.
Advokatfirmaet BAHR AS acts as legal advisor to the Company in connection with
the Private Placement. Advokatfirmaet Thommessen AS act as legal advisor to the
Managers in connection with the Private Placement.
Contacts:
Bård Stenberg, SVP IR & Corporate Communication
Mobile: +47 99 24 52 35
***
IMPORTANT NOTICE
This announcement is not and does not form a part of any offer to sell, or a
solicitation of an offer to purchase, any securities of PGS. The distribution of
this announcement and other information may be restricted by law in certain
jurisdictions. Copies of this announcement are not being made and may not be
distributed or sent into any jurisdiction in which such distribution would be
unlawful or would require registration or other measures. Persons into whose
possession this announcement or such other information should come are required
to inform themselves about and to observe any such restrictions.
The securities referred to in this announcement have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the “Securities
Act”), and accordingly may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of
the Securities Act and in accordance with applicable U.S. state securities laws.
The Company does not intend to register any part of the offering or their
securities in the United States or to conduct a public offering of securities in
the United States. Any sale in the United States of the securities mentioned in
this announcement will be made solely to “qualified institutional buyers” as
defined in Rule 144A under the Securities Act.
In any EEA Member State, this communication is only addressed to and is only
directed at qualified investors in that Member State within the meaning of the
Prospectus Regulation, i.e., only to investors who can receive the offer without
an approved prospectus in such EEA Member State. The expression “Prospectus
Regulation” means Regulation 2017/1129 as amended together with any applicable
implementing measures in any Member State.
This communication is only being distributed to and is only directed at persons
in the United Kingdom that are (i) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the “Order”) or (ii) high net worth entities,
and other persons to whom this announcement may lawfully be communicated,
falling within Article 49(2)(a) to (d) of the Order (all such persons together
being referred to as “relevant persons”). This communication must not be acted
on or relied on by persons who are not relevant persons. Any investment or
investment activity to which this communication relates is available only for
relevant persons and will be engaged in only with relevant persons. Persons
distributing this communication must satisfy themselves that it is lawful to do
so.
Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as “believe”, “expect”, “anticipate”,
“strategy”, “intends”, “estimate”, “will”, “may”, “continue”, “should” and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and are beyond its control.
Actual events may differ significantly from any anticipated development due to a
number of factors, including without limitation, changes in investment levels
and need for the Company’s services, changes in the general economic, political
and market conditions in the markets in which the Company operate, the Company’s
ability to attract, retain and motivate qualified personnel, changes in the
Company’s ability to engage in commercially acceptable acquisitions and
strategic investments, and changes in laws and regulation and the potential
impact of legal proceedings and actions. Such risks, uncertainties,
contingencies and other important factors could cause actual events to differ
materially from the expectations expressed or implied in this release by such
forward-looking statements. The Company does not provide any guarantees that the
assumptions underlying the forward-looking statements in this announcement are
free from errors nor does it accept any responsibility for the future accuracy
of the opinions expressed in this announcement or any obligation to update or
revise the statements in this announcement to reflect subsequent events. You
should not place undue reliance on the forward-looking statements in this
document.
The information, opinions and forward-looking statements contained in this
announcement speak only as at its date, and are subject to change without
notice. The Company does not undertake any obligation to review, update,
confirm, or to release publicly any revisions to any forward-looking statements
to reflect events that occur or circumstances that arise in relation to the
content of this announcement.
Neither the Managers nor any of their respective affiliates makes any
representation as to the accuracy or completeness of this announcement and none
of them accepts any responsibility for the contents of this announcement or any
matters referred to herein.
This announcement is for information purposes only and is not to be relied upon
in substitution for the exercise of independent judgment. It is not intended as
investment advice and under no circumstances is it to be used or considered as
an offer to sell, or a solicitation of an offer to buy any securities or a
recommendation to buy or sell any securities in the Company. Neither the
Managers nor any of their respective affiliates accepts any liability arising
from the use of this announcement.
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act.
Kilde
