HOUSTON, TX – Independence Contract Drilling (NYSE:ICD), Inc. (OTCQX:ICDI) has entered into a subscription agreement with affiliates of MSD Partners, L.P., and an affiliate of Glendon Capital Management L.P., securing $7.5 million through the issuance of convertible secured PIK toggle notes due in 2026. The transaction, which closed on Monday, aims to bolster the company's working capital.
The Houston-based oil and gas drilling company, which operates under the industrial classification of drilling oil and gas wells, announced the private placement of the Additional Notes on November 25, 2024. These notes were issued in accordance with the terms set forth in an Indenture dated March 18, 2022, with U.S. Bank Trust Company, National Association serving as trustee and collateral agent.
The proceeds from the issuance are designated for working capital purposes, a common practice for companies looking to improve liquidity or finance their day-to-day operations. The terms of the Subscription Agreement are detailed in an exhibit attached to the SEC filing, which provides a comprehensive view of the arrangement.
This strategic move by Independence Contract Drilling reflects a continued effort to secure funding in a manner that offers potential conversion to equity. Convertible notes are a form of debt that investors can convert into stock, typically at a discount to the future price.
The issuance of convertible notes is a noteworthy event for stakeholders and potential investors as it could influence the company's financial structure and future equity value. Independence Contract Drilling's decision to enter into this agreement underlines their pursuit of financial flexibility amidst the capital-intensive nature of the oil and gas industry.
The company's SEC filing, which serves as the source of this information, provides transparency on the terms of the agreement and the intended use of the funds raised through this financial instrument. As the company continues to navigate the market, this capital injection through a convertible note offering is a critical component of their financial strategy.
The details of the Subscription Agreement are publicly available in the SEC filing, ensuring that interested parties have access to the specifics of the transaction. This filing is in line with regulatory requirements and provides a clear record of Independence Contract Drilling's latest financial activities.
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