Finance - Restructuring
Vendors, royalty owners and other parties will be paid in ordinary course.
The case has been unusually contentious, with Sabine and its lenders squaring off against the official committee of unsecured creditors, led by Aurelius Capital Management, Reuters reported.
If the RSA is completed, Atlas Resource Partners’ debt will be reduced by about $900 million, and its interest expense will be reduced by $80 million, per year.
The proposed recapitalization is intended to be implemented through a corporate plan of arrangement under the Canada Business Corporations Act.
The company will swap equity for debt forgiveness, and partners such as Nabors Industries will see a vastly reduced stake in the company.
A tight pre-bankruptcy process is the key to ultimately having a successful reorganization.
"The successful completion of the solicitation process and today's filing represent the next step forward in our financial restructuring," CEO Jerry Winchester said, Reuters said.
The financing led by Access Bank includes Diamond Bank, Ecobank, FCMB, Fidelity Bank, Stanbic IBTC Bank, UBA, Union Bank and Zenith Bank. The facility is a five-year term loan, Reuters reported.
Akin Gump Strauss Hauer & Feld LLP is Hercules Offshore’s legal counsel; PJT Partners is its financial adviser; and FTI Consulting is its restructuring adviser.
Debt and restructuring experts at IPAA’s Managing Debt In Troubled Times conference discussed insights gained from past downturns and how to apply them to the present.
Under Phase 1 of the program, announced 13 months ago, Exco reduced net debt by 28%, to $1.1 billion as of March 2016. In September 2015, net debt was $1.5 billion.
The company's restructuring plan will also eliminate about $222 million of preferred equity, and reduce the company's annual interest payments by more than $200 million.