Seitel (NASDAQ:SEIEQ)
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Seitel Announces Bankruptcy Court Approval of Disclosure Statement; Record Date
Set for Voting on Reorganization Plan
HOUSTON, Feb. 6 /PRNewswire-FirstCall/ -- Seitel, Inc. (BULLETIN BOARD: SEIEQ)
("Seitel", the "Company" and collectively with certain subsidiaries, the
"Debtors") announced that it has received Bankruptcy Court approval of its Third
Amended Disclosure Statement (the "Disclosure Statement") filed in connection
with Seitel's previously announced plan of reorganization (the "Plan").
In connection with approval of the Disclosure Statement, the Bankruptcy Court
also established February 4, 2004 as the voting record date for holders of
claims and equity interests in the Debtors. The Disclosure Statement, including
the Plan and ballots for voting on the Plan are expected to be mailed to record
holders not later than February 12, 2004. The voting period for the Plan ends
at 5:00 PM on March 9, 2004. The Bankruptcy Court has set a hearing for March
18, 2004, at 1:30 PM prevailing eastern time to consider confirmation of the
Plan.
The Plan, which is supported by a standby funding commitment from Mellon HBV
Alternative Strategies LLC ("HBV") and is subject to various conditions to
effectiveness, would result in payment of 100% ofcreditors' claims in cash,
together with all post-petition interest. Each of Seitel's equity holders, as
of a warrant record date that will be five days prior to the effective date of
the Plan (the "Warrant Record Date"), would have the right to receive an
equivalent number of shares of reorganized Seitel's common stock plus warrants
entitling each holder thereof to purchase such number of shares of reorganized
Seitel common stock as required to retain its percentage equity ownership in
Seitel (subject to adjustment and dilution as set forth below). The warrants
will have an exercise price of 60 cents per share, subject to adjustment for
certain recapitalization events. The aggregate exercise price of the warrants
would be $75 million. The Company intends that the warrants will be freely
transferable and exercisable for 30 days following the effective date of the
Plan. Each equity holder who does not exercise its warrants will, as a result,
suffer up to approximately 83% dilution in its percentage equity ownership of
reorganized Seitel, not including the additional warrants to be issued to Mellon
as described below.
Subject to the Plan becoming effective, HBV (together with other investors to
whom HBV may assign an interest) has committedto purchase up to $75 million of
reorganized Seitel's common stock in the event such stock is not purchased by
Seitel's shareholders through the exercise of warrants. As compensation for its
standby commitment, HBV will be issued additional warrants to acquire up to 10%
of the fully diluted shares of common stock of reorganized Seitel. HBV's
additional warrants will have an exercise price of 72 cents per share, subject
to adjustment for certain recapitalization events, and will expire on the
seventh anniversary of their issuance.
The funding of payments for claims under Plan is to be provided from a portion
of Seitel's existing cash balances, the sale of new common stock pursuant to the
warrants to be issued to shareholders as of the Warrant Record Date and not less
than $180 million in proceeds of a high yield debt placement. The Company also
anticipates entering into a new revolving credit facility to supplement its
working capital needs following the effective date of the Plan and is engaged in
preliminary discussions with certain lending sources.
The foregoing is only a brief summary of the Plan and holders of Claims and
Equity Interests entitled to vote are urged to read the Disclosure Statement and
its exhibits, including the Plan carefully and in their entirety. Any conflicts
between the Plan and this summary will be determined solely by reference to the
Plan. There can be no assurance that the Plan will be confirmed by the
Bankruptcy Court or will become effective or the timingthereof.
This press release does not constitute an offer to sell or the solicitation of
an offer to buy any securities of the Company. The securities may not be
offered or sold in the United States absent registration under the Securities
Act of 1933, as amended (the "Securities Act"), or an applicable exemption from
such registration. There shall not be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction.
ABOUT SEITEL
Seitel markets its proprietary seismic information/technology to more than 400
petroleum companies, licensing data from its library and creating new seismic
surveys under multi-clientprojects. Statements in this release about the
future outlook related to Seitel involve known and unknown risks and
uncertainties, which may cause the Company's actual results to differ materially
from expected results. While the Company believes itsforecasting assumptions
are reasonable, there are factors that are hard to predict and influenced by
economic and other conditions that are beyond the Company's control. Among the
other important factors which could cause actual results to differ materially
from those in the forward-looking statements are potential changes in the terms
of the proposed amended plan of reorganization, the failure of the Bankruptcy
Court to confirm the amended plan, or the failure of the amended plan to
otherwise become effective, as well as other factors detailed in the Disclosure
Statement or in Seitel's filings with the Securities and Exchange Commission,
including its most recent Form 10-K Annual Report, a copy of which may be
obtained from the Company without charge.
DATASOURCE: Seitel, Inc.
CONTACT: Seitel, Inc., +1-713-881-8900
Web site: http://www.seitel-inc.com/