Ion Geophysical Stock (IO): Why The Price Substantially Went Up Today

By Amit Chowdhry ● Jan 18, 2022
  • The stock price of Ion Geophysical Corp (NYSE: IO) increased by over 50% pre-market today. This is why it happened.

The stock price of Ion Geophysical Corp (NYSE: IO) increased by over 50% pre-market today. Investors are responding positively to ION announcing that it has entered into a Forbearance and Fifth Amendment with PNC Bank, National Association (PNC), under its Revolving Credit and Security Agreement dated August 22, 2014 (the credit agreement), pursuant to which PNC has agreed to waive, through and including February 15, 2022, a cross default that would have occurred under the Credit Agreement as ION has not yet paid the scheduled interest payment due on December 15, 2021, on its 8.00% Senior Secured Second Priority Notes due 2025 (the 2025 Notes) prior to the expiration of the 30-day grace period under the 2025 Notes indenture. 

Plus ION also announced that it had entered into agreements with holders of more than 79% of its 2025 Notes to forbear until February 15, 2022, from enforcing their rights and remedies arising as a result of ION’s failure to make the December 15, 2021 interest payment due on the 2025 Notes. And the forbearances are subject to the terms and conditions of the relevant agreements with PNC and the noteholders.

ION is remaining in continuing discussions with PNC and the holders of its 2025 Notes and other indebtedness regarding various strategic alternatives to strengthen its financial position and maximize stakeholder value. And these strategic alternatives include, among others, a sale or business combination transaction or sales of assets, any of which may be executed as part of an in-court or out-of-court restructuring process.

Preliminary fourth quarter 2021 revenues of ~$40 million, which is a 45% increase year-over-year

ION also announced that the company expects fourth-quarter 2021 revenues to be approximately $40 million, an increase of 45% year-over-year. While expected fourth-quarter 2021 revenues declined by 10% sequentially, second-half fiscal year revenues delivered an increase of approximately 150% over the first half year’s revenues.

KEY QUOTE:

“Fourth quarter revenues improved year-over-year, consistent with our expectations of momentum building from our growing data library and maritime digitalization strategy. Sales of the latest phases of our Brazil 3D reprocessing program, Picanha, illustrate the value clients ascribe to this program which now tops over 150,000 contiguous square kilometers in the Campos and Santos basins. The third and fully underwritten extension of our new 3D program in the North Sea has concluded acquisition for the season. Our traditional BasinSPAN 2D programs continue to demonstrate resilience through sales in Africa and Brazil, despite the pullback in exploration spending. And lastly, our software business continues to expand into new markets. On December 17, 2021, we announced awards for Marlin in the areas of simultaneous operations and country-scale port management. Our latest contract is for a five-year deployment of Marlin to optimize offshore logistics in the Asia Pacific region for a supermajor.”

— Chris Usher, ION’s President and Chief Executive Officer

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