Trading of New Common Stock to Commence on NYSE
American under Ticker “FTSI” on November 20, 2020
FTS International, Inc. (NYSE American: FTSI) (“FTSI” or the
“Company”) today announced that it has successfully completed its
fully consensual financial restructuring and has emerged from
Chapter 11.
Michael Doss, Chief Executive Officer, commented, “Today is an
important day for FTSI. We have quickly and efficiently completed
our financial restructuring and emerge with sufficient cash and
revolving credit capacity to deploy stacked fleets, invest in new
technology, rebuild working capital and create long-term value for
our stakeholders.”
“FTSI is a leader in the pressure pumping space and with the
entire organization focused on enhancing the value proposition to
our customers, we will continue to set records in operational
performance and attract new customer relationships. Our team and
our pressure pumping fleet are well-positioned to quickly take
advantage of increased customer demand as the world returns to a
more normalized environment. I would like to express my gratitude
to all of our employees for their dedication during this process,
and thank our customers, vendors, and service providers for their
continued cooperation and support.”
“The new owners, which include Amundi Pioneer Asset Management,
Glendon Capital Management, Wexford Capital, and the Wilks
Brothers, have deep industry experience, and understand the value
of FTSI and the proposition to our customers and the industry,”
continued Mr. Doss. “We expect them to be active partners, who are
strongly committed to supporting our company. The proactive
transaction agreed to by our equity and debt holders enhances value
for all stakeholders and solidifies the company’s prospects for the
future—I am proud that FTSI now has one of the cleanest balance
sheets of any public, pure-play pressure pumping company.”
As previously announced, the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division confirmed FTSI’s
prepackaged plan of reorganization (the “Confirmed Plan”) on
November 4, 2020. Pursuant to the Confirmed Plan, FTSI deleveraged
its balance sheet by equitizing all prepetition funded debt,
resulting in holders of FTSI’s legacy senior notes and term loan
collectively holding over 90% of FTSI’s new common stock. Holders
of FTSI’s legacy equity interests received approximately 9.4% of
FTSI’s new common stock under the Confirmed Plan.
Upon emergence, FTSI expects to have approximately $90 million
cash on hand and has entered into a new $40 million asset-based
revolving credit facility with Wells Fargo Bank, N.A., as
administrative agent and lender, to support working capital
needs.
Issuance of Equity and Listing on the
NYSE American
In connection with emergence from Chapter 11, all of the
Company’s existing equity interests will be cancelled and will
cease to exist, effective before the market opens on November 20,
2020. At emergence, approximately 13,687,620 shares of new Class A
common stock are outstanding, with 49 million shares authorized at
emergence. Shares of the Company’s new Class A common stock will
commence trading on the NYSE American under the ticker symbol
“FTSI” on November 20, 2020. Additionally, at emergence,
approximately 312,306 shares of the Company’s new Class B common
stock are outstanding, with 1 million shares of Class B common
stock authorized at emergence. Shares of the Company’s new Class B
common stock are identical to the shares of the Company’s new Class
A common stock, except that such shares will not be listed on any
stock exchange.
In addition, 1,555,521 Tranche 1 Warrants exercisable for one
share of Class A common stock per Tranche 1 Warrant were issued at
emergence at an initial exercise price of $33.04, expiring on
November 19, 2023 and 3,888,849 Tranche 2 Warrants exercisable for
one share of Class A common stock per Tranche 2 Warrant were issued
at emergence at an initial exercise price of $37.14, expiring on
November 19, 2023.
Details of the restructuring, the securities issued pursuant to
the Confirmed Plan and the debt and other agreements entered into
as part of the Plan will be provided in a Form 8-K which can be
viewed on the Company’s website or the Securities and Exchange
Commission’s (“SEC”) website at www.sec.gov.
Adoption of Rights
Agreement
FTSI’s Board of Directors has also approved the adoption of a
stockholder rights agreement (the “Rights Agreement”) and declared
a dividend distribution of one right (“Right”) for each outstanding
share of common stock (both Class A common stock and Class B common
stock) outstanding as of the record date. The record date for such
dividend distribution is November 30, 2020. The Rights expire,
without any further action being required to be taken by FTSI’s
Board of Directors, on November 18, 2021.
The adoption of the Rights Agreement is intended to enable all
FTSI stockholders to realize the full potential value of their
investment in the company and to protect the interests of the
Company and its stockholders by reducing the likelihood that any
person or group gains control of FTSI through acquisitions from
other stockholders, open market accumulation or other tactics
(especially in current volatile markets) without paying an
appropriate control premium. In addition, the Rights Agreement
provides the FTSI Board of Directors with time to make informed
decisions that are in the best long-term interests of FTSI and its
stockholders and does not deter the FTSI Board of Directors from
considering any offer that is fair and otherwise in the best
interest of FTSI stockholders. Under the Rights Agreement, the
rights generally would become exercisable only if a person or group
acquires beneficial ownership of 20% or more of FTSI common stock
in a transaction not approved by the FTSI Board of Directors.
Further details of the Rights Agreement will be contained in a
Current Report on Form 8-K and in a Registration Statement on Form
8-A that FTSI will be filing with the SEC. These filings will be
available on the SEC’s web site at www.sec.gov.
Kirkland & Ellis LLP and Winston & Strawn LLP acted as
legal advisors, Lazard Frères & Co, acted as financial advisor,
and Alvarez & Marsal North America, LLC acted as restructuring
advisor to the Company. Davis Polk & Wardwell LLP acted as
legal advisor, and Ducera Partners, LLC and Silver Foundry, LP
acted as financial advisor for the ad hoc group of secured
noteholders. Stroock & Stroock & Lavan LLP acted as legal
counsel to the ad hoc group of term loan lenders.
Court filings and other documents related to the restructuring
are available on a separate website administered by the Company’s
claims agent, Epiq, at https://dm.epiq11.com/FTSI. For inquiries
regarding the Company’s emergence, please call the hotline
established by Epiq at (888) 490-0882 (toll-free in the United
States and Canada) or (503) 597-5602 (outside the United
States).
About FTS International,
Inc.
Headquartered in Fort Worth, Texas, FTSI is an independent
hydraulic fracturing service company and one of the only vertically
integrated service providers of its kind in North America.
To learn more, visit www.FTSI.com
Forward-Looking
Statements
This news release contains statements that we believe to be
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements other than historical facts,
including, without limitation, statements regarding our future
financial position, business strategy, projected revenues,
earnings, costs, capital expenditures and debt levels, and plans
and objectives of management for future operations, are
forward-looking statements. When used in this news release, words
such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,”
“believe” or “should” or the negative thereof or variations thereon
or similar terminology are generally intended to identify
forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in, or implied by, such
statements.
These risks and uncertainties include, but are not limited to:
the effects of the Chapter 11 petitions (the “Chapter 11 Cases”)
the effects of the Chapter 11 Cases on the Company’s liquidity or
results of operations or business prospects; the effects of the
Chapter 11 Cases on the Company’s business and the interests of
various constituents; further declines in domestic spending by the
onshore oil and natural gas industry; continued volatility in oil
and natural gas prices; the effect of a loss of, financial distress
of, or decline in activity levels of, one or more significant
customers; actions of the Organization of the Petroleum Exporting
Countries, or OPEC, its members and other state-controlled oil
companies relating to oil price and production controls; the
Company’s inability to employ a sufficient number of key employees,
technical personnel and other skilled or qualified workers; the
price and availability of alternative fuels and energy sources; the
discovery rates of new oil and natural gas reserves; the
availability of water resources, suitable proppant and chemicals in
sufficient quantities and pricing for use in hydraulic fracturing
fluids; uncertainty in capital and commodities markets and the
ability of oil and natural gas producers to raise equity capital
and debt financing; potential securities litigation and other
litigation and legal proceedings, including arbitration
proceedings; the Company’s ability to participate in consolidation
opportunities within its industry; the ability to successfully
manage the economic and operational challenges associated with a
disease outbreak, including epidemics, pandemics, or similar
widespread public health concerns, including the COVID-19 pandemic;
the ultimate geographic spread, duration and severity of the
COVID-19 outbreak, and the effectiveness of actions taken, or
actions that may be taken, by governmental authorities to contain
such outbreak or treat its impact ; the ultimate duration and
impact of geopolitical events that adversely affect the price of
oil, including the Saudi-Russia price war earlier this year; and a
deterioration in general economic conditions or a weakening of the
broader energy industry. We assume no obligation, and disclaim any
duty, to update the forward-looking statements in this news
release.
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version on businesswire.com: https://www.businesswire.com/news/home/20201119006212/en/
Lance Turner Chief Financial Officer 817-862-2000
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