Item 8.01 Other Events
On September 6, 2019, the Board of Directors (the “Board”) of Parker Drilling Company, a Delaware corporation (the “Company”), upon the recommendation of the Finance and Strategic Planning Committee of the Board (the “Committee”), which consists solely of independent directors, approved a 1-for-100 reverse stock split of the Company’s common stock (the “Reverse Stock Split”), which will be followed immediately by a 100-for-1 forward stock split of the Company’s common stock (the “Forward Stock Split” and, together with the Reverse Stock Split, the “Stock Splits”) as part of a plan to (i) cease the registration of the Company’s common stock under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) delist its shares of common stock from the New York Stock Exchange and (iii) suspend the Company’s duty to file periodic reports and other information with the Securities and Exchange Commission (the “SEC”) under Section 15(d) of the Exchange Act (collectively, the “Transaction”). The proposed Stock Splits are subject to obtaining the requisite approval of the Company’s stockholders at a Special Meeting of Stockholders to be held for that purpose, which is currently expected to occur later this year.
As a result of the Stock Splits, stockholders owning fewer than 100 shares of common stock at the effective time of the Stock Splits would receive $30.00 in cash, without interest, for each pre-split share of common stock held by them at the effective time of the Stock Splits, and thereafter they would no longer be stockholders of the Company. Stockholders owning 100 or more shares at the effective time of the Stock Splits (“Continuing Stockholders”) would not be entitled to receive any cash for their fractional share interests resulting from the Stock Splits, if any. The Forward Stock Split, which would immediately follow the Reverse Stock Split, would reconvert whole shares and fractional share interests held by the Continuing Stockholders back into the same number of shares of the Company’s common stock held by such Continuing Stockholders immediately before the effective time of the Stock Splits. As a result of the Forward Stock Split, the total number of shares of the Company’s common stock held by a Continuing Stockholder would not change as a result of the Stock Splits. The Company estimates that approximately 37,446 shares of the Company’s common stock (or less than approximately 0.2% of the shares of common stock currently outstanding) would be cashed out in the Stock Splits and the aggregate cost to the Company of the Stock Splits would be approximately $1.1 million, plus transaction expenses, which are estimated to be approximately $0.8 million, all of which the Company intends to fund using cash-on-hand.
Each of the proposed Stock Splits will be submitted to a vote of the Company’s stockholders at a Special Meeting of Stockholders to be called for that purpose. Approval of the Stock Splits requires the affirmative vote of a majority of the outstanding shares of the Company’s common stock entitled to vote at the Special Meeting of Stockholders. As of September 5, 2019, the Company’s (i) directors and executive officers and (ii) 10% shareholders, which consist of Värde Partners, Inc. and Brigade Capital Management, LP, have indicated that they intend to vote all their shares (17,231 and 9,317,302 shares, respectively) in favor of the Stock Splits. The combined holdings of the Company’s (i) directors and executive officers and (ii) 10% stockholders comprise approximately 0.1% and 61.9% of the Company’s outstanding shares, respectively.
The terms of the Stock Splits and information about the overall Transaction will be set forth in the preliminary proxy statement and a transaction statement on Schedule 13E-3 filed by the Company outlining the Transaction. The Transaction may be considered a “going private” transaction as defined in Rule 13e-3 promulgated under the Exchange Act, as it is part of a plan to terminate the registration of the Company’s common stock under Sections 12(b) and 12(g) of the Exchange Act and suspend the Company’s duty to file periodic reports and other information with the SEC under Section 15(d) thereunder, and to delist the Company’s common stock from the New York Stock Exchange.
The Company intends to treat persons who hold shares of its common stock in “street name” through a bank, broker or other nominee in the same manner as persons who hold shares of its common stock in their own names. Banks, brokers or other nominees will be instructed to effect the Transaction for their customers holding the Company’s common stock in “street name.” However, these banks, brokers or other nominees may have different procedures than registered stockholders for processing the Transaction and making payments for fractional shares. If you hold shares of the Company’s common stock with a bank, broker or other nominee and have any questions in this regard, the Company encourages you to contact your bank, broker or other nominee.
The Board may abandon the Stock Splits at any time prior to the filing and effectiveness of the applicable amendments to the Company’s certificate of incorporation, even after stockholder approval, if the Board determines in its business judgment that the Stock Splits or the overall Transaction is no longer in the best interests of the Company or its stockholders.
On September 10, 2019, the Company issued a press release announcing the Transaction, a letter to its employees, and answers to Frequently Asked Questions relating to the Transaction, which are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and are incorporated by reference herein.