DEFR14A: Nabors Energy Transition II Seeks Indefinite Extension, Trust Fund Access

Nabors Energy Transition Corp. II amends its proxy statement to seek shareholder approval for an indefinite extension of its existence and to allow withdrawal of trust account interest for operating expenses, while abandoning its business combination pursuit.

Summary

• The Company filed an Amendment No. 1 to its definitive proxy statement, originally filed on October 27, 2025, for an extraordinary general meeting of shareholders to be held on November 14, 2025.
• Proposal No. 2 has been revised to permit the Company to deposit future interest earned on the Trust Account funds into its operating account, eliminating the previous provision allowing withdrawal of up to $0.50 per Public Share.
• The Company is no longer pursuing an initial business combination or the e2 Business Combination.
• The Board believes it is in the best interest of the Company to remain in existence indefinitely to receive payments under a Settlement Agreement and Notes.
• The Sponsor will not fund any further Monthly Extension Payments, which were previously $250,000 per month.
• Shareholders who do not redeem their Public Shares will receive a pro rata portion of Trust Account funds upon liquidation, and a pro rata portion of payments under the Settlement Agreement and Notes, and other funds held outside the Trust Account, net of fees and expenses.
• The Company expects to be delisted from The Nasdaq Stock Market LLC following the Redemptions.
• The Company has approximately $10.0 million in incurred fees and expenses.
• The Company has approximately $4.1 million in loans from direct and indirect owners of the Sponsor and Monthly Extension Payments.
• The Company has $2.0 million in working capital loans outstanding payable to Nabors Lux, which are being used to pay a portion of the incurred fees and expenses.

Sentiment

Score: 2

Explanation: The company is effectively abandoning its core business purpose, facing delisting, and has significant liabilities. While it proposes to exist indefinitely for settlement payments, this represents a poor outcome for shareholders who invested in a SPAC for a business combination, indicating a fundamental failure of its original strategy.

Positives

• The Board believes continued existence is in the best interest of the Company and shareholders to receive payments under the Settlement Agreement and Notes.
• Shareholders not redeeming will still receive pro rata distributions from the Trust Account and Settlement/Notes payments upon eventual liquidation.

Negatives

• The Company is abandoning its primary objective of pursuing an initial business combination.
• The Sponsor will no longer fund Monthly Extension Payments, which were previously $250,000 per month.
• The Company expects to be delisted from Nasdaq following redemptions.
• There are significant incurred fees and expenses of approximately $10.0 million.
• The Company has outstanding loans totaling approximately $6.1 million ($4.1 million from Sponsor owners/Monthly Extension Payments and $2.0 million working capital from Nabors Lux).
• There is no assurance that payments under the Settlement Agreement and Notes will be received in full or at all.
• Shareholders who do not redeem their Public Shares now will not have another opportunity to do so for their pro rata portion of Trust Account funds.

Risks

• No assurances that payments under the Settlement Agreement and Notes will be received in full or at all.
• Uncertainty regarding the amount of fees and expenses the Company will incur.
• The Company expects to be delisted from Nasdaq, which may impact liquidity and share value.
• Future interest earned on Trust Account funds and payments received under the Settlement Agreement and Notes may be used to pay Company fees and expenses, including reimbursement of loans and out-of-pocket expenses by the Sponsor and its affiliates and the Company's officers and directors.
• Holders of Public Shares remaining after redemptions will not have another opportunity to redeem their shares for their pro rata portion of the funds available in the Trust Account.
• The Company will remain in existence indefinitely, potentially tying up shareholder capital for an extended period without a clear business combination.

Future Outlook

The Company will remain in existence indefinitely or until the Board determines to liquidate and dissolve. It does not intend to pursue an initial business combination or the e2 Business Combination. The Company expects to be delisted from Nasdaq. The Board expects to declare pro rata distributions of net proceeds from Settlement Agreement and Notes payments from time to time, and future interest earned on Trust Account funds will be deposited into the Company's operating account.

Management Comments

• The Board believes it is in the best interests of the Company and its shareholders to provide for the continued existence of the Company even without the Monthly Extension Payments, and the Board currently anticipates maintaining the Company's existence until all payments are made under the Settlement Agreement and the Notes.
• The Company does not intend to pursue an initial business combination or the e2 Business Combination at this time.
• We expect the Board will declare pro rata distributions of net proceeds of payments under the Settlement Agreement and the Notes from time to time following receipt thereof, but there can be no assurances that such payments will be received in full or at all or as to the amount of fees and expenses of the Company, and any such distribution will be at the discretion of the Board.

Industry Context

This filing reflects a significant pivot for a Special Purpose Acquisition Company (SPAC) that has failed to identify and complete a business combination within its stipulated timeframe. While many SPACs seek extensions, the decision to abandon the business combination strategy entirely and instead exist indefinitely to collect settlement payments is highly unusual. The expected delisting from Nasdaq is a common consequence for SPACs that do not complete a de-SPAC transaction and fail to meet ongoing listing requirements, aligning with the broader trend of unsuccessful SPACs facing liquidation or significant restructuring.

Comparison to Industry Standards

• Many SPACs face challenges in identifying and completing suitable business combinations within their initial timeframe, often leading to extensions or liquidation.
• The decision to cease pursuing a business combination and instead exist indefinitely to collect settlement payments is a highly unusual outcome for a SPAC, deviating significantly from the standard SPAC lifecycle which typically involves a de-SPAC transaction or liquidation.
• The expected delisting from Nasdaq is a common consequence for SPACs that fail to complete a business combination and maintain listing requirements, aligning with industry trends for unsuccessful SPACs.

Corporate Governance

Legal Proceedings

• The Company anticipates receiving payments under a 'Settlement Agreement and Notes', indicating the resolution of a past legal matter rather than an ongoing proceeding.

Related Party Transactions

• The Sponsor (Nabors Energy Transition Sponsor II LLC) previously provided an Overfunding Loan of $3,000,000 (and up to an additional $450,000).
• The Sponsor (or its affiliates or designees) deposited $1.0 million for four one-month extensions, in exchange for non-interest bearing, unsecured promissory notes.
• The Sponsor has informed the Board it does not intend to fund any further Monthly Extension Payments.
• The Company has $2.0 million in working capital loans outstanding payable to Nabors Lux, an affiliate, with proceeds used for incurred fees and expenses.
• Future interest earned on Trust Account funds and payments under the Settlement Agreement and Notes may be used to reimburse loans and out-of-pocket expenses by the Sponsor and its affiliates and the Company's officers and directors.

Stakeholder Impact

• Shareholders: Those who redeem will receive their pro rata share. Those who do not redeem will lose the opportunity to redeem later, will hold shares in a delisted company no longer pursuing its original business purpose, and will receive a pro rata share of Trust Account funds upon eventual liquidation and uncertain settlement payments, net of significant fees and expenses.
• Sponsor/Affiliates: Will cease funding monthly extensions but may be reimbursed for past loans and expenses from future interest and settlement payments.
• Underwriters: The deferred underwriting discounts and commissions of $10,675,000, typically payable upon a business combination, face significant uncertainty as the Company is no longer pursuing such a transaction.

Next Steps

• Shareholders will vote on the Articles Amendment Proposal, IMTA Amendment Proposal, and Adjournment Proposal at the Extraordinary General Meeting on November 14, 2025.
• If approved, the Company will file the Articles Amendment with the Registrar of Companies in the Cayman Islands.
• The Board will determine the timing for the Company's eventual liquidation and dissolution.
• The Board expects to declare pro rata distributions of net proceeds from payments under the Settlement Agreement and the Notes from time to time.

Key Dates

Recommendation

The company's pivot from seeking a business combination to existing indefinitely solely to collect uncertain settlement payments, coupled with an expected Nasdaq delisting and substantial outstanding fees and loans, represents a fundamental failure of its SPAC model. Shareholders who invested for a potential growth opportunity through a business combination are now left with a delisted entity with an unclear path to value realization, making a 'sell' recommendation appropriate to minimize further exposure to a highly speculative and underperforming asset.

Keywords

SPAC, Proxy Statement, Trust Account, Shareholder Meeting, Delisting, Indefinite Extension, Investment Management Trust Agreement, Corporate Governance, Redemption, Settlement Agreement, Nabors Energy Transition Corp. II