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Key Energy extends solicitation of noteholder consents, receives support for one of two issues
New York, Jan. 19 - Key Energy Services, Inc. said it has extended its solicitation of consents from holders of its 6 3/8% senior notes due 2013 and 8 3/8% senior notes due 2008 to 5 p.m. ET on Jan. 21 from 5 p.m. ET on Jan. 18.
The company said that as of Jan. 18 it had received consents from holders of the 6 3/8% notes but not from holders of the 8 3/8% notes.
The solicitation, announced on Jan. 7, is to extend until March 31 the deadline for filing the 2003 10-K and 2004 10-Q reports.
When the solicitation was announced, Key Energy said it had received a notice from the note trustee stating that it is in breach of the financial reporting covenants contained in the note indentures. Unless the deficiency is remedied within 60 days, an event of default will occur. If a default occurs, then the trustee or holders of 25% of the outstanding principal amount of either series of notes will have the right to accelerate the maturity of that series of notes.
Under the solicitation, holders who deliver consents will receive a payment of $2.50 per $1,000 principal amount.
Key Energy will also pay to consenting holders an additional $2.50 in cash per $1,000 principal amount within three business days of each of Feb. 1 and March 1 if it has not filed the reports by those dates.
Key Energy, a Midland, Texas, well service company, said that the solicitation is subject to conditions including the receipt of consents for a majority of each series of notes.
Lehman Brothers is solicitation agent (800 438-3242 or 212 528-7581) and D.F. King & Co., Inc. is information agent (800 848-2998 or 212 269-5550).
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