Forum Energy Technologies, Inc. Announces Preliminary Results of Pending Exchange Offer
July 20 2020 - 6:53AM
Business Wire
Forum Energy Technologies, Inc. (“Forum” or the “Company”)
(NYSE: FET) today announced that as of the preliminary tender
deadline, which was 5:00 p.m. ET on July 17, 2020, participation in
its pending exchange offer for the 6.25% senior notes due 2021 fell
short of the amount required to consummate the transaction.
The minimum participation condition to the closing of the
exchange offer is 95% of the approximately $328 million principal
amount of the existing notes. However, as of the preliminary tender
deadline, tenders from only 86.4% of the existing notes had been
received. The minimum participation condition must be satisfied or
waived prior to consummation of the exchange offer.
As the Company has previously indicated, in light of its current
financial condition and the current market and industry conditions,
if it is unable to obtain the minimum participation, it will review
any and all of its remaining alternatives, including bankruptcy.
Investors should be aware that, in the event of a bankruptcy, there
can be no assurance that they will be able to recover their
investment in the existing notes.
Accordingly, the Company has extended the previous tender
deadlines to allow investors who have not already submitted their
tenders to do so. In order to participate in the offer,
investors should promptly contact their bank, broker or other
custodian. For tender instructions, investors may also contact
D.F. King & Co., Inc., the information agent for the exchange
offer, at (866) 864-7961 (toll-free) or (212) 269-5550 (for banks
and brokers), by email to forum@dfking.com or by accessing the
website www.dfking.com/forum.
The new deadlines for participation have been extended so that
investors now have until 11:59 p.m. ET on July 31, 2020 to
participate in the exchange offer and receive $1,000 principal
amount of new 9.00% convertible secured notes due 2025 for each
$1,000 principal amount of existing notes tendered. At such time,
the exchange offer will expire, unless further extended. If the
offer is consummated, participating investors will also receive a
pro rata share of an aggregate cash fee of $3,500,000 and accrued
and unpaid interest on their existing notes in cash.
The Company will also pay a retail broker’s fee of $2.50 in cash
per $1,000 principal amount of tendered notes, subject to a cap of
$1,000 in cash per investor and subject to completion of the
required documentation.
Investors who have previously tendered their existing notes need
not take any further action in response to this announcement. The
new notes will pay interest at the rate of 9.00% (as compared to
the rate of 6.25% on the existing notes). Of such interest, 6.25%
will be payable in cash and 2.75% will be payable in cash or
additional notes, at the Company’s option. The new notes will
mature five years from issuance (as compared to the maturity of
October 1, 2021 on the existing notes). The new notes will be
secured by a first lien on substantially all of the Company’s
assets, except for revolving credit facility collateral, which will
secure the new notes on a second lien basis. The new notes will
also be convertible into common stock upon specified terms.
Any existing notes that remain outstanding after closing of the
exchange offer will remain unsecured and will be effectively
subordinated to the new notes with respect to substantially all the
assets of the Company. In addition, the covenants for the existing
notes will be eliminated upon the receipt of the requisite majority
consents.
The description above includes only a summary of certain key
terms of the exchange offer. The complete terms and conditions of
the amended exchange offer are contained in a registration
statement on Form S-4 for the new notes, including a prospectus and
prospectus supplement, which are subject to change, filed by the
Company with the Securities and Exchange Commission, which
registration statement is not yet effective. Investors are urged to
carefully read the prospectus and prospectus supplement before
making any decision with respect to the exchange offer.
BofA Securities, Wells Fargo Securities, LLC, Citigroup Global
Markets Inc. and J.P. Morgan Securities LLC are acting as the
dealer managers for the exchange offer. The exchange offer is being
made, and the new notes are being offered and issued, only to
holders of existing notes. Copies of the prospectus and prospectus
supplement pursuant to which the exchange offer is being made may
be obtained from D.F. King & Co., Inc., as described above.
Questions regarding the terms and conditions of the exchange offer
should be directed to BofA Securities at (980) 388-3646 or
debt_advisory@bofa.com.
None of the Company, the dealer managers, the trustee with
respect to the existing notes and the new notes, the information
and exchange agent or any affiliate of any of them makes any
recommendation as to whether holders of the existing notes should
exchange their existing notes for new notes in the exchange offer,
and no one has been authorized by any of them to make such a
recommendation. Holders must make their own decision as to whether
to tender existing notes and, if so, the principal amount of
existing notes to tender.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective. This press release is for informational purposes
only and is not an offer to purchase or a solicitation of an offer
to purchase or sell any securities, nor shall there be any sale of
any 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 Forum
Forum Energy Technologies, Inc. is a global oilfield products
company, serving the drilling, downhole, subsea, completions and
production sectors of the oil and natural gas industry. The
Company’s products include highly engineered capital equipment as
well as products that are consumed in the drilling, well
construction, production and transportation of oil and natural gas.
Forum is headquartered in Houston, TX with manufacturing and
distribution facilities strategically located around the globe. For
more information, please visit www.f-e-t.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20200720005351/en/
Investor Contact Executive Vice President and Chief Financial
Officer Lyle Williams 713.351.7920 lyle.williams@f-e-t.com
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