Cerberus Capital Management LP is leading lenders seeking control of KKR & Co.-owned Samson Resources Co. in a restructuring that would provide little recovery for lower- ranking creditors including Blackstone Group LP’s credit arm, according to two people with knowledge of the talks, Bloomberg said June 10.

The Cerberus-led proposal for the producer of oil and natural gas is an alternative to a plan from unsecured bondholders, who are seeking to swap some of their securities for senior debt while receiving equity for the rest, the people said.

The Cerberus plan would allow it and other holders of a $1 billion second-lien term loan due in September 2018 to convert their holdings to equity, according to the people, who asked not to be named because the discussions are private. It also would raise $200 million to $400 million of new capital through a rights offering, they said.

The bondholder group led by Blackstone’s GSO Capital Partners, which owns Samson’s $2.25 billion of 9.75 percent senior unsecured notes due February 2020, would have the option to participate in that offering but would receive little or no recovery on their securities, the people said.

Brian Maddox, a spokesman for Samson Resources at FTI Consulting, Christine Anderson, a spokeswoman at Blackstone, and Kristi Huller at KKR, declined to comment. John Dillard, a spokesman for Cerberus at Weber Shandwick, also declined to comment.

Bonds Drop

Samson’s $2.25 billion of 9.75 percent senior unsecured bonds maturing Feb. 2020 have fallen 33.5 cents on the dollar this year to last trade at 8 cents on June 3, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The term loan has declined to 46 cents on the dollar from 85.9 cents, according to data compiled by Bloomberg.

The company also owes $950 million on a fully-drawn first- lien revolving loan that matures in December 2016. The borrowing base was reduced in March by $50 million to reflect the drop in the commodities prices.

The company, which was purchased by KKR in 2011 in a $7.2 billion leveraged buyout, hired law firm Kirkland & Ellis LLP and Blackstone’s advisory unit in February as restructuring advisers. The company produces oil and natural gas from shale formations, and its ability to service its debt has decreased with the plunge in energy prices that began a year ago.

U.S. crude has lost 44 percent of its value since June 20, 2014, dropping to $58.26 a barrel.