HOUSTON, Sept. 10, 2019 /PRNewswire/ -- Parker Drilling
Company (NYSE: PKD) ("Parker" or the "Company") today announced
that its Finance and Strategic Planning Committee, which consists
solely of independent directors, has recommended, and its Board of
Directors (the "Board") has approved, a plan to cease the
registration of the Company's common stock under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), following
the completion of a proposed reverse stock split transaction, which
will be followed immediately by a forward stock split, and to
delist its shares of common stock from trading on the New York
Stock Exchange (the "NYSE").
In order to deregister its shares of common stock, the Company
must reduce its number of stockholders of record to below 300. To
accomplish this, the Board is proposing to amend the Company's
amended and restated certificate of incorporation to effect a
1-for-100 reverse stock split, in which holders of less than 100
shares of the Company's common stock would be cashed out at a price
of $30.00 per pre-split share in lieu
of fractional shares. Such price represents a premium above the
common stock's closing price on September
10, 2019. Stockholders owning 100 or more shares of the
Company's common stock prior to the reverse stock split would
remain stockholders in Parker. The number of shares such continuing
stockholders would own following the proposed stock splits would be
unchanged, as immediately after the reverse stock split a forward
split of 100-for-1 would be applied to the continuing stockholders,
negating any effects to them. Parker estimates that approximately
37,446 shares (or less than approximately 0.2% of the shares of its
common stock currently outstanding) would be cashed out in the
proposed transaction and the aggregate cost to the Company of the
proposed transaction would be approximately $1,100,000, plus transaction expenses, which are
estimated to be approximately $800,000, all of which Parker intends to fund
using cash-on-hand.
Each of the Finance and Strategic Planning Committee and the
Board has determined that the costs of being a public reporting
company outweigh the benefits, and, therefore, it is no longer in
the best interests of the Company's stockholders for the Company to
remain a public reporting company. In determining to approve the
proposed transaction, the Board considered the following factors,
among others:
- Even after giving effect to the proposed transaction, the
Company's corporate ethics and governance standards will continue
to reflect its commitment to integrity, and safe, profitable
operations for the benefit of its stockholders, customers,
employees, and communities where the Company operates. Accordingly,
its commitment to the highest standards of corporate governance,
accounting practices, safety and environmental responsibility, and
regulatory compliance will remain an integral part of the Company's
culture, and the Company will continue to strive to be the most
innovative, reliable and efficient company in its
industry.
- The Company believes that its common stock is undervalued,
which prevents it from realizing the traditional benefits of public
company status. Furthermore, the concentration of ownership of the
Company's common stock following its restructuring and the
resulting low-volume of trading limits the liquidity of the
Company's common stock.
- The Company expects to save approximately $800,000 annually after effecting the proposed
transaction, primarily as a result of a reduction in professional
fees of lawyers and accountants, a potential reduction in insurance
premiums for our directors' and officers' liability insurance, and
printing, mailing, and other costs that its incurs to comply with
SEC reporting and compliance requirements. Following the proposed
transaction, the Company will continue to prepare audited annual
and unaudited quarterly financial statements for its lenders, as
required pursuant to the Company's loan agreements. The Company
intends to make such financial information available to its
stockholders on a voluntary basis.
- The reduction in time spent by the Company's management and
employees complying with the requirements applicable to SEC
reporting companies will enable them to focus more on managing the
Company's businesses, strengthening relationships with clients and
vendors and growing stockholder value, with a focus on long-term
growth without an undue distraction by short-term financial results
and stock price movement.
- The Company's smallest stockholders (those holding fewer than
100 shares), who represent a disproportionally large number of the
Company's record holders (but only approximately 0.2% of the
Company's outstanding shares), will receive a premium in cash over
market prices prevailing at the time of this public announcement,
without incurring brokerage commissions.
The Company will hold a Special Meeting of Stockholders (the
"Special Meeting"), which is expected to be held later this year,
for the purpose of approving the stock splits. In connection with
the Special Meeting, the Company will file a definitive proxy
statement and related Schedule 13E-3 with the SEC that provides
greater detail on the proposed transaction and the Special Meeting.
Approval of the proposed stock splits requires the affirmative vote
of a majority of the outstanding shares of our common stock
entitled to vote at the Special Meeting. As of September 5, 2019, the Company's (i) executive
officers and directors and (ii) 10% shareholders, which consist of
Värde Partners and Brigade Capital Management, LP, have indicated
that they intend to vote all their shares (17,231 and 9,317,302
shares, respectively) in favor of the stock splits. The combined
holdings of our (i) directors and executive officers and (ii) 10%
stockholders comprise approximately 0.1% and 61.9% of the Company's
outstanding shares, respectively.
If approved by the Company's stockholders, promptly after the
Special Meeting, the Company expects to take steps to terminate the
registration of its common stock with the SEC and delist its common
stock from the NYSE. Upon effectiveness, (i) the Company would
cease to file annual, quarterly, current and other reports and
documents with the SEC, and (ii) the Company's common stock would
no longer be listed on the NYSE. Absent "no-action" or other relief
from the SEC, the Company's duty to file periodic and current
reports with the SEC will not be suspended with respect to the
current fiscal year due to existing registration statements filed
under the Securities Act of 1933, as amended. Whether or not the
SEC grants the Company any requested relief, the Company intends to
cease filing periodic and current reports required under the
Exchange Act as soon as it is permitted to do so under applicable
laws, rules and regulations.
The Company intends to treat persons who hold shares of its
common stock in "street name," through a bank, broker or other
nominee, in the same manner as persons who hold shares of its
common stock in their own names. Banks, brokers or other nominees
will be instructed to effect the stock splits for their customers
holding the Company's common stock in "street name." However, these
banks, brokers or other nominees may have different procedures than
registered stockholders for processing the transaction and making
payments for fractional shares. If you hold shares of the Company's
common stock with a bank, broker or other nominee and have any
questions in this regard, the Company encourages you to contact
your bank, broker or other nominee.
The Board reserves the right to change the ratio of the reverse
stock split to the extent it believes it is necessary or desirable
in order to accomplish the Company's goal of staying below 300
record holders. The Board may also abandon the proposed reverse
stock split at any time prior to the completion of the proposed
transaction if it believes the proposed transaction is no longer in
the best interests of the Company or its stockholders. Houlihan
Lokey Capital, Inc., acted as financial advisor to the Finance and
Strategic Planning Committee.
About Parker Drilling
Parker Drilling provides drilling
services and rental tools to the energy industry. The Company's
Drilling Services business serves operators through the use of
Parker-owned and customer-owned rig fleets in select U.S. and
international markets, specializing in remote and harsh environment
regions. The Company's Rental Tools Services business supplies
premium equipment and well services to operators on land and
offshore in the U.S. and international markets. More information
about Parker Drilling can be found
on the Company's website at www.parkerdrilling.com.
Additional Information and Where to Find It
THIS PRESS RELEASE IS ONLY A BRIEF DESCRIPTION OF THE PROPOSED
TRANSACTION. IT IS NOT A REQUEST FOR OR SOLICITATION OF A
PROXY OR AN OFFER TO ACQUIRE OR SELL ANY SHARES OF COMMON STOCK.
THE COMPANY INTENDS TO FILE A PROXY STATEMENT AND OTHER REQUIRED
MATERIALS, INCLUDING A SCHEDULE 13E-3, WITH THE SEC CONCERNING THE
PROPOSED STOCK SPLITS. A COPY OF ALL FINAL PROXY MATERIALS
WILL BE MADE AVAILABLE TO STOCKHOLDERS PRIOR TO A SPECIAL MEETING
OF STOCKHOLDERS AT WHICH THE COMPANY'S STOCKHOLDERS WILL BE ASKED
TO VOTE ON THE PROPOSALS DESCRIBED IN THE MATERIALS PROVIDED BY THE
COMPANY. THE COMPANY URGES ALL STOCKHOLDERS TO READ THE PROXY
STATEMENT WHEN IT BECOMES AVAILABLE, AS WELL AS ALL OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, BECAUSE THOSE DOCUMENTS WILL INCLUDE
IMPORTANT INFORMATION. A FREE COPY OF ALL MATERIALS THE COMPANY
FILES WITH THE SEC, INCLUDING THE COMPANY'S SCHEDULE 13E-3 AND
PROXY STATEMENT, WILL BE AVAILABLE AT NO COST ON THE SEC'S WEBSITE
AT WWW.SEC.GOV. WHEN THOSE DOCUMENTS BECOME AVAILABLE, THE PROXY
STATEMENT AND OTHER DOCUMENTS FILED BY THE COMPANY MAY ALSO BE
OBTAINED WITHOUT CHARGE BY DIRECTING A REQUEST TO PARKER DRILLING
COMPANY, 5 GREENWAY PLAZA, SUITE 100, HOUSTON, TEXAS 77046, ATTENTION: CORPORATE
SECRETARY.
Participants in the Solicitation
The Company and its directors and executive officers may be
deemed to be participants in the solicitation of proxies in
connection with the proposed transaction. Information
concerning such participants is set forth in the Company's Annual
Report on Form 10-K filed with the SEC on March 11, 2019, as amended by the Form 10-K/A
filed on April 29, 2019. To the
extent that holdings of the Company's securities have changed since
the amounts printed in the Company's Form 10-K, such changes have
been or will be reflected on Statements of Change in Ownership on
Form 4 filed with the SEC. Additional information regarding the
interests of such participants in the solicitation of proxies in
connection with the proposed transaction will be included in the
proxy statement to be filed by the Company with the SEC in
connection with the proposed transaction.
Forward-Looking Statements
This press release may contain forward-looking statements that
are being made pursuant to the Private Securities Litigation Reform
Act of 1995, which provides a "safe harbor" for forward-looking
statements to encourage companies to provide prospective
information so long as those statements are accompanied by
meaningful cautionary statements identifying important factors that
could cause actual results to differ materially from those
discussed in the statement. Such forward-looking statements
include statements about the perceived benefits and costs of the
proposed transaction, the number of shares of the Company's common
stock that are expected to be cashed out in the proposed
transaction and the timing and stockholder approval of the proposed
transaction. Such forward-looking statements are subject to a
number of known and unknown risks and uncertainties that could
cause actual results, performance or achievements to differ
materially from those described or implied in such forward-looking
statements. Accordingly, actual results may differ materially from
such forward-looking statements. The forward-looking statements
relating to the transaction discussed above are based on the
Company's current expectations, assumptions, estimates and
projections about the Company and involve significant risks and
uncertainties, including the many variables that may impact the
Company's projected cost savings, variables and risks related to
consummation of the proposed transaction, SEC regulatory review of
the Company's filings related to the proposed transaction, and the
continuing determination of the Board of Directors and the Finance
and Strategic Planning Committee that the proposed transaction is
in the best interests of all stockholders. The Company assumes no
obligation for updating any such forward-looking statements to
reflect actual results, changes in assumptions or changes in other
factors affecting such forward-looking statements.
Contact:
Nick Henley
Director, Investor Relations
(+1) (281) 406-2082
nick.henley@parkerdrilling.com
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SOURCE Parker Drilling Company