Layne Christensen Company (Nasdaq:LAYN) ("Layne" or the "Company")
announced today that it has priced its issuance of approximately
$100 million aggregate principal amount of 8.00% Senior Secured
Second Lien Convertible Notes (the "notes"). The notes will be
issued to certain of the existing holders of the Company's 4.25%
Convertible Senior Notes due 2018 (the "existing convertible
notes") who have agreed to exchange $55.5 million of their existing
convertible notes for approximately $49.9 million of the notes and
to purchase approximately $49.9 million aggregate principal amount
of additional notes for cash. The Company estimates that the net
cash proceeds from the sale of the notes, after deducting placement
agency discounts and commissions, estimated offering expenses
payable by the Company and accrued interest on the existing
convertible notes being exchanged, will equal approximately $45.1
million. The Company intends to use the net cash proceeds to repay
amounts outstanding under its existing asset-based credit agreement
(without reducing the commitments) and for general corporate
purposes.
As previously disclosed, Layne's consolidated liquidity (defined
as the sum of availability under our senior credit facility and
total cash and cash equivalents) improved during the first nine
months of FY 2015, rising to approximately $108 million at Q3 FY
2015 from approximately $84 million at Q2 FY 2015. The Company
estimates that consolidated liquidity at Q4 FY 2015 will be
slightly below that of Q2 FY 2015, but well within expectations
given the seasonal nature of the business. With the completion of
this notes offering, the Company anticipates Q4 FY 2015
consolidated liquidity will improve by approximately $40 million to
between $115 and $125 million.
Michael J. Caliel, President and Chief Executive Officer,
commented, "By further enhancing our liquidity, we view this notes
offering as part of our ongoing strategic restructuring efforts and
long-term growth initiatives. With growing backlog in certain
segments, we believe Layne faces attractive investment
opportunities. We expect our enhanced liquidity position to enable
us to take advantage of strategic opportunities where we are
experiencing increased customer demand for our services, including
in our Inliner and Water Resources segments. Additionally, we
expect our liquidity position to further strengthen as a result of
our previously disclosed strategy of non-core asset sales."
The notes will bear interest at a rate of 8.00% per year,
payable on May 1 and November 1 of each year beginning May 1, 2015.
The notes will mature on May 1, 2019; provided, however, that,
unless all of the then-outstanding existing convertible notes (or
any permitted refinancing indebtedness in respect thereof) have
been redeemed, repurchased, otherwise retired, discharged in
accordance with their terms or converted into the Company's common
stock, or shall have been effectively discharged (in the case of
the existing convertible notes), in each case on or prior to August
15, 2018 or the scheduled maturity date of the existing convertible
notes (or any permitted refinancing indebtedness incurred in
respect thereof) is extended to a date that is after October 15,
2019, the notes will mature on August 15, 2018.
Prior to the maturity date, the Company may redeem for cash all,
but not less than all, of the notes. However, the Company may not
redeem the notes outside of two "open redemption periods" unless
the last reported sale price of the Company's common stock equals
or exceeds 140% of the conversion price of the notes for a
specified time period ending on, and including, the trading day
immediately prior to the date on which the Company delivers the
redemption notice. The first open redemption period will commence
on February 15, 2018 and end on, and include, August 14, 2018, and
the second open redemption period will commence on November 1, 2018
and end on April 30, 2019. The redemption price will equal 100% of
the principal amount of the notes to be redeemed, plus accrued and
unpaid interest, if any, to, but excluding, the redemption date. In
addition, if the redemption date is during an open redemption
period, the holders will receive the present value of any
additional interest payments through the end of the open redemption
period. In addition, upon the occurrence of a "fundamental change"
(as defined in the indenture governing the notes), holders of the
notes will have the right, at their option, to require the Company
to repurchase their notes in cash at a price equal to 100% of the
principal amount of the notes to be repurchased, plus accrued and
unpaid interest to, but excluding, the fundamental change
repurchase date.
The notes will be convertible into shares of the Company's
common stock (and cash in lieu of any fractional share) at the
option of the holders until the close of business on the scheduled
trading day immediately preceding the maturity date. The conversion
rate for the notes will initially be 76.9231 shares of common stock
per $1,000 principal amount, which is equivalent to an initial
conversion price of approximately $13.00 per share of common stock.
The initial conversion price of the notes represents a premium of
approximately 55.5% to the $8.36 per share last reported sale price
of the Company's common stock on the NASDAQ Global Select Market on
February 4, 2015. The conversion rate will be subject to adjustment
upon the occurrence of certain events. In addition, the Company may
be obligated to increase the conversion rate for any conversion
that occurs in connection with certain corporate events, including
the Company's calling the notes for redemption. No holder will have
the right to convert any notes into shares of common stock to the
extent that the conversion would cause that holder to beneficially
own more than 9.9% of the shares of the Company's common stock then
outstanding after giving effect to the proposed conversion.
The notes will generally be secured by a second lien on the same
assets that secure the Company's asset-based credit agreement and
guaranteed by the same subsidiaries that guarantee the asset-based
credit agreement.
The notes will have certain covenants that, among other things,
restrict the ability of the Company and its restricted
subsidiaries, subject to certain exceptions, to: (1) incur
additional indebtedness; (2) create liens; (3) declare or pay
dividends on, make distributions with respect to, or purchase or
redeem, the Company's or its restricted subsidiaries' equity
interests, or make certain payments on subordinated or unsecured
indebtedness or make certain investments; (4) enter into certain
transactions with affiliates; (5) engage in certain asset sales
unless specified conditions are satisfied; and (6) designate
certain subsidiaries as unrestricted subsidiaries.
Jefferies acted as the sole placement agent and exclusive
financial advisor for the offering
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the
notes or any common stock issuable upon conversion of the notes, in
any state or jurisdiction in which such offer, solicitation or sale
would be unlawful. The offer and sale of the notes and any shares
of the Company's common stock issuable upon conversion of the notes
have not been registered under the Securities Act of 1933, as
amended, or applicable state securities laws, and the notes and
shares may not be offered or sold in the United States or to U.S.
persons absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
About Layne Christensen Company
Layne is a global solutions provider to the world of essential
natural resources—water, mineral and energy. We offer innovative,
sustainable products and services with an enduring commitment to
safety, excellence and integrity.
Forward-Looking Statements
This press release includes forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of
1995, that are subject to risks, uncertainties and other factors.
These forward-looking statements include statements regarding
the completion, timing, size and terms of the proposed offering,
the Company's planned use of any of the proceeds of that offering
and the Company's estimated liquidity as of the end of Q4 FY 2015.
Actual results and the timing of events could differ materially
from those anticipated in the forward-looking statements as a
result of several factors, including, but not limited to, market
and other general economic conditions, the Company's ability to
satisfy the conditions required to close the proposed offering and
the availability of equity or debt capital needed for the Company's
business. In addition, the estimate of the Company's liquidity is
preliminary and may change pending the completion and audit of the
Company's FY 2015 financial statements and the calculation of the
Company's borrowing base under its asset-based credit facility. The
reader is cautioned not to rely on these forward-looking
statements. Other risks and uncertainties are described in detail
in Exhibit 99.2 to the Company's Current Report on Form 8-K as
filed with the U.S. Securities and Exchange Commission on October
29, 2014. All forward-looking statements are based on information
currently available to the Company and the Company assumes no
obligation to update any such forward-looking statements, except as
may be required by law.
CONTACT: Andy Atchison
Chief Financial Officer
Layne Christensen Company
(281) 475-2670
Layne Christensen Company (delisted) (NASDAQ:LAYN)
Historical Stock Chart
From Jul 2024 to Aug 2024
Layne Christensen Company (delisted) (NASDAQ:LAYN)
Historical Stock Chart
From Aug 2023 to Aug 2024