Current Report Filing (8-k)
June 12 2018 - 6:09AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 12, 2018 (June 5, 2018)
NATIONAL
ENERGY SERVICES REUNITED CORP.
(Exact
name of registrant as specified in its charter)
British
Virgin Islands
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001-38091
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N/A
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification Number)
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777
Post Oak Blvd., Suite 730
Houston,
Texas
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77056
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(832) 925-3777
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [X]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01. Entry into a Material Definitive Agreement.
On June 5, 2018, in
connection with the acquisitions by National Energy Services Reunited Corp (the “Company” or “NESR”)
of Gulf Energy SAOC (“GES”) and National Petroleum Services (the “Business Combination”), which acquisitions
were consummated on June 6, 2018, NESR entered into the following agreements with Hana Investments Co. WLL (“Hana Investments”):
(i) a Loan Agreement; (ii) a Share Purchase Exchange Agreement (iii) a Relationship Agreement; and (iv) a Registration Rights
Agreement.
Loan
Agreement
Pursuant to the Loan Agreement,
the Company borrowed $50,000,000 from Hana Investments (the “Olayan Loan”) on an unsecured basis. The Olayan Loan
matures on December 17, 2018 and can be prepaid at any time in NESR ordinary shares at a conversion rate of $11.244 per
share or cash, at the election of the lender, after the Company delivers five business days’ notice of its intent
to repay the Olayan Loan. The Olayan Loan is interest bearing and will accrue interest at the greater of (i) an amount equal to
$4.0 million payable on maturity or prorated if the loan is prepaid, and (ii) at a rate per annum equal to One Month ICE
LIBOR, adjusted monthly on the first day of each calendar month, plus a margin of 2.25% payable on maturity or the date the loan
is prepaid. The interest is payable in NESR ordinary shares at the conversion rate of $11.244 per share or cash at the election
of the lender. In addition, Hana Investments has the right to convert the principal of the Olayan Loan into NESR ordinary shares
on or prior to maturity at a conversion rate of $11.244 per share. The loan is subject to an origination fee of $600,000 payable
in NESR ordinary shares at $11.244 per share or 53,362 shares at the closing of the Business Combination. If as a result of exercising
any conversion rights in the Olayan Loan, Hana Investments’ total share ownership equals or exceeds 20% of the then outstanding
NESR shares, then the conversion of any amount into NESR ordinary shares will be contingent upon NESR receiving shareholder approval
for such issuance of NESR ordinary shares.
Shares
Purchase Exchange Agreement
The Shares Purchase Exchange
Agreement provides that Hana Investments shall contribute to the Company the NPS shares owned by Hana Investments as of the Business
Combination closing date and NESR shall issue to Hana Investments 13,340,448 shares of NESR ordinary shares. In addition, at closing
the Company agreed to pay Hana Investments interest of $4.7 million on Hana Investments initial purchase of NPS shares. The Company
has the right to pay the interest in cash or issue 418,001 NESR ordinary shares to Hana Investments. The Company also agreed to
enter into the Registration Rights Agreement related to any shares issued by the Company pursuant to the Shares Purchase
Exchange Agreement and to enter into the Relationship Agreement.
Relationship
Agreement
The Relationship
Agreement sets out certain rights to which Hana Investments will be entitled as a shareholder of the Company and certain
obligations of the Company and NESR Holdings Ltd. (“NESR Holdings”), being a shareholder of the
Company. The Relationship Agreement entitles Hana Investments to have the right, as long as Hana Investments and its
affiliates collectively hold, in the aggregate, at least 6,879,225 NESR ordinary shares, (i) to nominate, and the Company and
NESR Holdings shall take all action necessary to cause the NESR board of directors (the “NESR Board”) to include one
director to the NESR Board, (ii) a second independent director by agreement with the Company management and subject
to approval of the NESR Board, and (iii) Hana Investments shall also have the right to nominate, and the
Company and NESR Holdings shall take all necessary action to cause the Company senior management to include, one Executive
Vice President who shall oversee the Company’s operations. Hana Investments further agreed that any shares of the
Company received by Hana Investments pursuant to the Shares Purchase Agreement will not be sold by Hana Investments prior to
six months after the closing of the Business Combination. The Company also agreed to reimburse Hana Investments for transaction
fees and expenses in the amount of $2.4 million through the issuance of NESR ordinary shares at a conversion rate of
$11.244 per share at the closing of the Business Combination.
Registration
Rights Agreement
The
Registration Rights Agreement provides that any time after the closing of the Business Combination Hana Investments may make a
written demand for registration under the Securities Act of 1933 all or a part of the NESR ordinary shares or other securities
held by Hana Investments and the Company shall file a registration statement within 60 days of receiving such demand. The agreement
also provides that the registration of securities by the Company in response to such demand can be completed by the Company offering
securities in an underwritten offering and Hana Investments shall have the right to participate in any underwritten offering or
by participating in certain other registrations of securities by the Company. The Company also agrees to file a shelf registration
statement within 4 months following the closing of the Business Combination and to maintain the effectiveness of any shelf registration
and that the Company shall file any reports or take further actions allow Hana Investments to sell any registered securities pursuant
to Rule 144 under the Securities Act.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
disclosure set forth in Item 1.01 to this Report relating to the Loan Agreement is incorporated into this item by reference.
Item
3.02. Unregistered Sales of Equity Securities.
In
connection with the closing of the Business Combination, and as described in more detail in Item 1.01 of this Report, the Company
issued an aggregate of 14,025,258 ordinary shares to Hana Investments. Such issuance was not registered under the Securities Act
of 1933, as amended (the “Securities Act”), in reliance on the exemption from registration provided by Section 4(a)(2)
of the Securities Act. The disclosure set forth above in Item 1.01 of this Report is incorporated by reference herein.
Item
9.01.
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Financial
Statements and Exhibits
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(d)
Exhibits.
Exhibit
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Number
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Exhibit
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10.1
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Loan Agreement, dated June 5, 2018, by and between National Energy Services Reunited Corp. and Hana Investments Co. WLL
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10.2
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Shares Purchase Exchange Agreement, dated June 5, 2018, by and between National Energy Services Reunited Corp. and Hana Investments Co. WLL
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10.3
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Relationship Agreement, dated June 5, 2018, by and between National Energy Services Reunited Corp. and Hana Investments Co. WLL
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10.4
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Registration Rights Agreement, dated June 5, 2018, by and between National Energy Services Reunited Corp. and Hana Investments Co. WLL
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated:
June 12, 2018
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NATIONAL
ENERGY SERVICES REUNITED CORP.
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By:
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/s/ Sherif
Foda
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Name:
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Sherif
Foda
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Title:
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Chief
Executive Officer
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