The U.S. Bankruptcy Court approved Bonanza Creek Energy’s Disclosure Statement and concurrently confirmed its Third Amended Joint Prepackaged Plan of Reorganization. According to a corporate release, the Company anticipates Plan effectiveness before May 2017.
Richard Carty, Bonanza Creek’s president and C.E.O., comments, “We will emerge as a strong and deleveraged company with a competitive business plan that will position us well vis a vis our industry peers. Bonanza Creek is thankful for the steadfast support of our dedicated employees, creditors, vendors and other parties throughout the restructuring process.” The Plan incorporates the terms of the restructuring supporting agreement the Company entered into with certain noteholders and one of its crude oil purchase and sale counterparties, NGL Crude Logistics, and its parent, NGL Energy Partners. The Plan equitizes more than $867 million of unsecured debt, eliminates over $50 million in annual cash interest, and completes a new capital raise of $200 million through the rights offering.
In addition, the Plan implements (i) agreements the Company reached with its existing secured lenders to continue their support of the Company through an amended and restated revolving reserved based lending agreement, (ii) a settlement with the Company’s equity holders to provide them with their pro rata share of up to 4.5% of the equity of reorganized Bonanza Creek, subject to dilution as set forth in the Plan, and three year warrants for up to 7.5% of such equity of reorganized Bonanza Creek and (iii) a settlement with members of an ad hoc group of equity holders.
This independent energy company filed for Chapter 11 protection on January 4, 2017, listing $1.3 billion in pre-petition assets.
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