HOUSTON, March 29, 2020 /PRNewswire/ -- CARBO
Ceramics Inc. ("CARBO" or "the Company") today announced that it
has reached an agreement with Wilks Brothers, LLC and Equify
Financial, LLC (together, the "Wilks Brothers") under which the
Wilks Brothers will acquire the Company through a debt-for-equity
exchange pursuant to a plan of reorganization in a Chapter 11
bankruptcy case. To facilitate the agreement and effectuate the
transaction, the Company initiated a voluntary Chapter 11 process
in the U.S. Bankruptcy Court for the Southern District of
Texas, Houston Division. CARBO
expects to continue to operate in the ordinary course throughout
the Chapter 11 process.
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"Like many companies with a significant concentration in the oil
and gas industry, we have felt the impact of the challenging
business environment and, in response, have worked diligently to
strengthen our overall financial foundation," said Gary Kolstad, Chairman and Chief Executive
Officer. "While CARBO has undoubtedly made progress in our
transformation strategy, we ultimately expect these headwinds to
persist. Accordingly, we are pleased to reach an agreement with the
Wilks Brothers; we are excited by their belief in the promise of
CARBO's business and their commitment to our future. We are
confident that, under their ownership and investment, we will be
better positioned to maximize value, realize the potential of CARBO
and serve our customers as we move forward."
The Wilks Brothers have committed to providing $15 million in debtor-in-possession ("DIP")
financing and consented to the use of its cash collateral to
bolster CARBO's financial position and finance its operations
through the process. This financing, combined with CARBO's usual
operating cash flows, will allow CARBO to continue to operate in
the ordinary course through the restructuring process.
"We have long believed in the underlying strength of CARBO's
business, as exemplified by our multi-year relationship with the
Company," said Matt Wilks for Wilks
Brothers, LLC. "This transaction will allow us to invest in the
future of CARBO as we pursue opportunities to unlock value and
support growth."
Consummation of the plan and the restructuring is subject to the
approval of the bankruptcy court. Additional information about
CARBO's Chapter 11 cases can be found at http://dm.epiq11.com/Carbo
or by calling (866) 977-0978 in the U.S. or +1 (503) 520-4410
internationally.
CARBO is advised in this matter by Vinson & Elkins L.L.P.,
Perella Weinberg Partners L.P. (together with its corporate
advisory affiliates including Tudor Pickering Holt & Co.), and
FTI Consulting, Inc.
About CARBO
CARBO® is a global technology company that provides
products and services to several markets, including oil and gas,
industrial, agricultural, and environmental markets to enhance
value for its clients.
CARBO Oilfield Technologies - is a leading provider of
market-leading technologies to create engineered production
enhancements solutions that help E&P operators to design, build
and optimize the frac - increasing well production and estimated
ultimate recovery, and lower finding and development cost per
barrel of oil equivalent.
CARBO Industrial Technologies - is a leading provider of
high-performance ceramic media and industrial technologies
engineered to increase process efficiency, improve end-product
quality and reduce operating cost. CARBO has world class
manufacturing expertise. We bring new products to market faster to
meet client demands.
CARBO Environmental Technologies - is a leading provider of
spill prevention and containment solutions that provide the highest
level of protection for clients' assets and the environment in oil
and gas and industrial applications. Our range of innovative
products feature a proprietary polyurea coating technology that
creates a seamless, impermeable, maintenance-free layer of
protection.
For more information, please visit www.carboceramics.com.
Forward-Looking Statements
This news release contains "forward-looking statements" within
the meaning of the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements are not statements of historical facts and often contain
words such as "may," "will," "expect," "believe," "anticipate,"
"plan," "estimate," "seek," "could," "should," "intend,"
"potential," or words of similar meaning. Forward-looking
statements are based on management's current expectations, beliefs,
assumptions and estimates regarding the Company, industry, economic
conditions, government regulations and energy policies and other
factors. Forward-looking statements may include, for example,
statements regarding the Chapter 11 cases, the DIP facility, the
Company's ability to complete the restructuring and its ability to
continue operating in the ordinary course while the Chapter 11
cases are pending. These statements are subject to significant
risks, uncertainties, and assumptions that are difficult to predict
and could cause actual results to differ materially and adversely
from those expressed or implied in the forward-looking statements,
including risks and uncertainties regarding the Company's ability
to successfully complete a reorganization process under Chapter 11,
including consummation of the restructuring; potential adverse
effects of the Chapter 11 cases on the Company's liquidity and
results of operations; the Company's ability to obtain timely
approval by the bankruptcy court with respect to the motions filed
in the Chapter 11 cases; objections to the Company's restructuring
process, the DIP facility, or other pleadings filed that could
protract the Chapter 11 cases; employee attrition and the Company's
ability to retain senior management and other key personnel due to
the distractions and uncertainties, including the Company's ability
to provide adequate compensation and benefits during the Chapter 11
cases; the Company's ability to comply with the restrictions
imposed by the terms and conditions of the DIP facility and other
financing arrangements; the Company's ability to maintain
relationships with suppliers, customers, employees and other third
parties and regulatory authorities as a result of the Chapter 11
filing; the effects of the Chapter 11 cases on the Company and on
the interests of various constituents, including holders of the
Company's common stock; the bankruptcy court's rulings in the
Chapter 11 cases, including the approvals of the terms and
conditions of the restructuring and the DIP facility, and the
outcome of the Chapter 11 cases generally; the length of time that
the Company will operate under Chapter 11 protection and the
continued availability of operating capital during the pendency of
the Chapter 11 cases; risks associated with third party motions in
the Chapter 11 cases, which may interfere with the Company's
ability to consummate the restructuring or an alternative
restructuring; increased administrative and legal costs related to
the Chapter 11 process; potential delays in the Chapter 11 process
due to the effects of the COVID-19 virus; and other litigation and
inherent risks involved in a bankruptcy process. Forward-looking
statements are also subject to the risk factors and cautionary
language described from time to time in the reports and
registration statements the Company files with the Securities and
Exchange Commission, including those in the Company's most recent
and forthcoming Annual Report on Form 10-K and any updates thereto
in the Company's Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K. Additional factors, events, or uncertainties that may
emerge from time to time, or those that the Company currently deems
to be immaterial, could cause the Company's actual results to
differ, and it is not possible for the Company to predict all of
them. The Company makes forward-looking statements based on
currently available information, and the Company assumes no
obligation to, and expressly disclaim any obligation to, update or
revise publicly any forward-looking statements made in this news
release, whether as a result of new information, future events or
otherwise, except as required by law.
Media Contact:
Rachel Chesley
FTI Consulting
212-850-5681
rachel.chesley@fticonsulting.com
Investor Relations Contact:
Mark Thomas
Director of Investor Relations
281-921-6400
Mark.Thomas@carboceramics.com
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SOURCE CARBO Ceramics Inc.
