Hanover Comp (NYSE:HC)
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Hanover Compressor Company (“Hanover”)
(NYSE:HC) today announced that Hanover Equipment Trust 2001A, a special
purpose Delaware business trust (“HET 2001A”),
will redeem all $133 million of its outstanding 8.5% Senior Secured
Notes due 2008 (the “8.5% Notes”),
and Hanover Equipment Trust 2001B, a special purpose Delaware business
trust (“HET 2001B”),
will redeem all $250 million of its outstanding 8.75% Senior Secured
Notes due 2011 (the “8.75% Notes,”
and, together with the 8.5% Notes, the “Notes”).
The indenture governing the 8.5% Notes permits the redemption of all of
the 8.5% Notes at a redemption price of 100% plus accrued and unpaid
interest to the date fixed for redemption. The indenture governing the
8.75% Notes permits the redemption of all of the 8.75% Notes at a
redemption price of 102.917% plus accrued and unpaid interest to the
date fixed for redemption. The redemption date of both series of Notes
is September 17, 2007.
To commence the redemption process, Hanover Compression Limited
Partnership, an indirect wholly owned subsidiary of Hanover (“HCLP”),
exercised its option to purchase from HET 2001A the gas compression
equipment currently under lease to HCLP from HET 2001A, and HCLP
exercised its option to purchase from HET 2001B the gas compression
equipment currently under lease from HET 2001B. HCLP expects to pay HET
2001A approximately $137.7 million and to pay HET 2001B approximately
$266.3 million for the equipment on the date the Notes are redeemed. The
trusts will then use the proceeds from the equipment sale to fund the
redemption of the Notes and the related trust equity certificates.
U.S. Bank Trust National Association is the trustee and redemption agent
for the Notes. Formal notice of the redemption setting forth the
redemption procedures was sent to noteholders on August 17, 2007.
The redemption of the Notes is part of the refinancing plan of Hanover
and Universal Compression Holdings, Inc. (“Universal”)
being implemented in anticipation of the closing of their pending
merger, which is currently expected to occur on or about August 20,
2007, if the conditions to the closing have been satisfied as of that
date. As part of the refinancing plan, Exterran Holdings, Inc., which
will be the publicly traded holding company following the completion of
the merger, has engaged Wachovia Capital Markets, LLC and J. P. Morgan
Securities Inc. to arrange and syndicate a senior secured credit
facility, consisting of a revolving credit facility and a term loan, and
has engaged Wachovia to provide a new asset-backed securitization
facility to Exterran. The primary purpose of these new facilities will
be to fund the redemption or repurchase of all of Hanover’s
and Universal’s outstanding debt other than
Hanover’s convertible debt securities and the
credit facility of Universal's publicly traded subsidiary, Universal
Compression Partners, L.P. The new facilities will replace Hanover’s
and Universal’s existing bank lines and
Universal's existing asset-backed securitization facility. The closing
of the new facilities is subject to, among other things, the receipt of
sufficient commitments from participating lenders and the execution of
mutually satisfactory documentation.
About Hanover Compressor Company
Hanover Compressor Company is a global market leader in full service
natural gas compression and a leading provider of service, fabrication
and equipment for oil and natural gas production, processing and
transportation applications. Hanover sells and rents this equipment and
provides complete operation and maintenance services, including run-time
guarantees for both customer-owned equipment and its fleet of rental
equipment.
Forward-Looking Statements
All statements in this release (and oral statements made regarding the
subjects of this release) other than historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements rely on
a number of assumptions concerning future events and are subject to a
number of uncertainties and factors, many of which are outside Hanover’s
control, which could cause actual results to differ materially from such
statements. Forward-looking information includes, but is not limited to,
statements regarding the ability of the parties to complete the
redemptions and equipment purchases, the timing of the redemptions and
equipment purchases, the use of proceeds from the equipment purchases,
the ability of Hanover and Universal to complete their proposed merger,
the expected timing of the closing of the merger, Hanover’s
and Universal’s plans for and the timing of
the refinancing of certain of their outstanding debt obligations and
Exterran’s plans for and the timing of its
entering into a new credit facility and asset-backed securitization
facility. While Hanover believes that the assumptions concerning future
events are reasonable, it cautions that there are inherent difficulties
in predicting certain important factors that could impact the future
performance or results of its or Exterran’s
business. Among the factors that could cause results to differ
materially from those indicated by such forward-looking statements are
the satisfaction of various conditions to the closing of the merger
contemplated by the merger agreement, the possible inability to obtain
sufficient commitments to the credit facility from participating lenders
or the inability to reach agreement with participating lenders on
mutually satisfactory documentation for the credit facility or the
securitization facility.
These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
Hanover’s Annual Report on Form 10-K for the
year ended December 31, 2006, as amended by Amendment No. 1 thereto, and
those set forth from time to time in Hanover’s
filings with the Securities and Exchange Commission (“SEC”),
which are available through www.hanover-co.com.
Except as required by law, Hanover expressly disclaims any intention or
obligation to revise or update any forward-looking statements whether as
a result of new information, future events, or otherwise.