HOUSTON, Aug. 27, 2013 /PRNewswire/ -- Platinum Energy Solutions, Inc. ("Platinum") today announced that it and holders of 95.1% (in principal amount) of its 14.250% senior secured notes due 2015 (the "Existing Notes"), 88.6% of preferred stock and 81.6% of common stock have entered into restructuring support agreements ("RSA") for a comprehensive balance-sheet restructuring. The proposed transactions will reduce Platinum's debt by 56% - from approximately $210 million to $92 million. In addition, Platinum is eliminating more than $90 million of contingent and other liabilities in connection with the transactions based on agreements reached with certain material contract counterparties.
More specifically, in accordance with the RSA, Platinum intends to launch an exchange offer that contemplates the following:
- Platinum will issue $35 million of new first lien senior secured notes to certain current noteholders, which will be used for, among other things, refinancing Platinum's existing $15 million first lien term facility and acquiring new equipment, which will allow Platinum to complete a third and fourth fleet;
- Platinum will offer existing noteholders the ability to exchange the Existing Notes for their pro rata share of (i) up to $55 million of second lien secured notes and (ii) 89.3% of new equity of Platinum's newly formed parent, Platinum Energy Holdings, Inc. ("Parent"), subject to dilution by the exercise of warrants and a new management equity incentive plan (the "New Stock");
- Existing preferred shareholders will each receive their pro rata share (in accordance with their respective distribution rights) of 10.7% of the New Stock; and
- Platinum expects to issue warrants to participating stockholders representing 12% of Parent's equity and to authorize a new management equity incentive plan comprising 3% of Parent's equity in connection with the closing of the exchange offer and related transactions.
The proposed transactions will right-size Platinum's capital structure and provide liquidity to support continued operations and planned operational investments aimed at expanding Platinum's ability to serve its customers. Platinum is continuing to conduct business as usual throughout its areas of operation, focusing on providing continued customer service excellence. Charlie Moncla, Platinum's Chief Executive Officer, expressed his appreciation for the support afforded Platinum by its noteholders, customers, employees, vendors, and suppliers during the past few months while the restructuring effort was ongoing. "I'm looking to the future," said Mr. Moncla. "The entire Platinum team looks forward to servicing the needs of our customers with our experienced and highly trained personnel, state of the art equipment, and unmatched safety record."
Consummation of the transactions contemplated by the RSA and the offering documents is expected to occur in September 2013, following finalization of documentation and completion of the exchange offer for Platinum's Existing Notes. Consummation of the exchange offer will be subject to a number of significant conditions, including a minimum tender condition, completion of the $35 million first lien senior secured notes issuance (or a financing in substitution thereof as provided for in the RSA) and the RSA remaining in effect.
The description of terms set forth above is subject to change based upon the negotiations by the parties, and the final transactions, if any, may include terms that are materially different than those terms described above or otherwise described in the RSA. The RSA is subject to various contingencies and Platinum offers no assurances that it will be able to execute the transactions as described in the support agreements or any other transaction.
The exchange offer for the noteholders will only be made, and copies of the offering documents will only be made available, to holders of Existing Notes that have certified certain matters to Platinum, including their status as "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933 (the "Securities Act"), an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3), or (7) under the Securities Act or an "accredited investor" within the meaning of Rule 501(a)(4) under the Securities Act, or as a "non-U.S. Person" within the meaning of the Securities Act.
None of the securities that Platinum expects to offer or sell pursuant to the transactions contemplated by the RSA, Platinum's solicitation of its stockholders, or the exchange offer have been or will be registered under the Securities Act, and none of them may be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the Securities Act.
This press release does not constitute an offer to purchase any securities or a solicitation of an offer to sell any securities. The exchange offer and Platinum's solicitation of its stockholders will be made only pursuant to the documents governing such matters and only to such persons and in such jurisdictions as is permitted under applicable law.
Platinum has provided certain financial information and other recent developments in its business to certain holders of its Existing Notes in connection with their review of Platinum's business. This information is publicly available at www.platinumenergysolutions.com/pes.
About Platinum Energy Solutions, Inc.
Platinum Energy Solutions, Inc. is a Houston, Texas based oilfield services provider specializing in premium hydraulic fracturing, coiled tubing and other pressure pumping services. Platinum utilizes modern, high pressure-rated fracturing equipment that allows it to handle challenging geological environments, reduce operating costs, increase asset utilization and deliver excellent customer service. Platinum's experienced management team, young fleet of equipment and stellar safety record give it an operational advantage in the hydraulic fracturing industry.
Forward Looking Statements
The information contained in this press release should be read in conjunction with our filings made with the Securities and Exchange Commission. This press release contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Words such as, but not limited to, "will," "intend," "expect," "would," "could," "must," "may," and similar expressions or phrases identify forward-looking statements.
Factors that may cause expected results or anticipated events or circumstances discussed in this press release to not occur or to differ from expected results include: the ability of the parties to agree on the final terms of the refinancing; our ability to close on the refinancing; our ability to satisfy other conditions of the refinancing; the ability of the investors to fund the refinancing; general conditions in the capital markets; general economic conditions; our ability to maintain adequate liquidity to operate our business; volatility in fuel prices; decreases in hydraulic fracturing operations nationwide; or our ability to continue as a going concern.
All forward-looking statements involve risk and uncertainties. In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this press release might not occur. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Platinum Energy Solutions, Inc.
