History
Global Geophysical Services listed in 2010, borrowed heavily, restated its accounts and entered Chapter 11 in 2014, then emerged in 2015 as a subsidiary with all shareholders wiped out.
2010-2012: Going public and loading up on debt
Global Geophysical Services Inc, a seismic data services company based in Missouri City, Texas, went public in April 2010. The New York Stock Exchange cleared its securities for trading on April 21. The company ended 2010 with 36,142,985 shares on issue.
The IPO closed on April 27, 2010, alongside a sale of $200 million of 10-1/2% senior notes due 2017. The money repaid and ended a $150.0 million first lien credit agreement, a $50.0 million second lien loan and a Citibank construction loan, which cost $160,000 in prepayment penalties. On April 30 the company opened a new $50.0 million revolving credit facility with Bank of America, secured on substantially all its assets.
The record is then quiet until March 2012, when the company sold a further $50 million of the same notes at 94% of face value. It expected net proceeds of about $45.5 million, to repay existing debt. That took its senior notes to $250 million.
2013: Costlier borrowing and a preferred share raising
In late September 2013 the company signed a Financing Agreement with TPG Specialty Lending and Tennenbaum Capital Partners. It provided an $82.8 million first lien Term Loan A and a $22.2 million delayed-draw Term Loan B, maturing September 30, 2016. Term Loan A paid off the Bank of America revolver in full. The loans carried interest at LIBOR plus 9.75%, required 75% of excess cash flow to go to prepayment, and set a minimum $10.0 million liquidity requirement.
In December the company turned to shareholders. It priced an offering of 347,827 depositary shares, each representing 1/1000th of an 11.5% Series A Cumulative Preferred Stock share, at $23.00 each against a $25.00 liquidation preference. MLV & Co. LLC underwrote the offering, which was expected to raise about $7.1 million net for general corporate purposes. A lender amendment let the company pay preferred dividends if it stayed within its covenants. The New York Stock Exchange cleared the securities for listing on December 13. Shares on issue stood at 39,695,528 at the end of 2014.
2014: Restatement and Chapter 11
The picture changed in March 2014. The company said its audited results for 2009-2012, and several quarterly results, could no longer be relied on because of accounting errors, and that it could not file its 2013 annual report on time. It disclosed a $61.6 million fourth-quarter 2013 impairment (a write-down) of its multi-client library, and said the TPG/Tennenbaum loan was fully drawn with access to more capital severely limited. The lenders agreed to a short forbearance, meaning they held off enforcing defaults.
It did not last. TPG accelerated the $81.765 million owed on March 24, and on March 25 the company and several subsidiaries filed for Chapter 11 in the Southern District of Texas. A $60 million debtor-in-possession loan, backstopped by holders of the senior notes, funded the case. The NYSE suspended trading in the common stock, and in August the exchange filed to remove securities from listing. UHY LLP resigned as auditor on December 1, 2014, and no successor had been named.
Through plans filed in September and October, and a Second Amended Plan on October 28, one feature never changed: all existing common and preferred equity would be cancelled with no distribution. The final plan created a new parent, Global Geophysical Services, LLC (GGS Holdings), which would run a rights offering to creditors.
2015: Emergence as a subsidiary
The court confirmed the Second Amended Plan on February 6, 2015, and the company emerged on February 9 as a wholly owned subsidiary of GGS Holdings. Old common and preferred shares were cancelled with no payment to holders, and 1,000 new shares went to GGS Holdings. Financial creditors received 1,195,158 new GGS Holdings units and 1,111,111 warrants, and trade creditors shared $3.25 million in cash.
The debtor-in-possession loan was replaced by new exit facilities. A first lien agreement provided a $25M revolver and a $60M term loan at 12.5%, and a second lien provided about $32.1M of term loan at 15.5%, added to by payment-in-kind. On February 10 the company terminated the registration of a class of its securities, ending its reporting obligation for them.
Written from the 17 story beats below (2010 to 10 Feb 2015), which come from the company's own announcements and filings.