The U.S. Bankruptcy Court approved Stone Energy’s Disclosure Statement and concurrently confirmed its Second Amended Joint Plan of Reorganization.
According to a corporate release, the Plan contemplates the following treatment of claims against and interests in the Debtors: “Holders of claims under the Debtors’ existing first lien credit facility will receive their proportionate share of commitments under a new $200 million first lien reserve-based revolving credit facility and cash in an amount equal to the aggregate amount of unrestricted cash of the Debtors as of the Effective Date in excess of $25 million (net of any accrued and unpaid administrative claims and certain other payments, escrows or distributions pursuant to the Plan and the Appalachia Sale Agreement) until reduction of the outstanding obligations to $0; Holders of claims under the Debtors’ existing unsecured notes (the ‘Noteholders’) will receive their proportionate share of (i) $100 million in cash (the ‘Prepetition Notes Cash’), (ii) $225 million of 7.5% senior second lien notes due 2022 (the ‘New Secured Notes’) and (iii) 95% of the common stock in the reorganized Company, prior to dilution for the Management Equity Incentive Program and the New Warrants; Holders of general unsecured claims shall be unaltered and paid in full.”
In addition, “Holders of the Company’s existing common stock will receive, subject to the terms and conditions of the Plan, their proportionate share of (i) 5% of the common stock in the reorganized Company, prior to dilution for the Management Equity Incentive Program and the New Warrants, and (ii) New Warrants representing the right to purchase 15% of the common stock of the reorganized Company with an exercise price equal to a total equity value of the Reorganized Debtors that implies a 100% recovery of outstanding principal to the Noteholders plus accrued interest through the Effective Date less the face amount of the New Secured Notes and the Prepetition Notes Cash.”
The release notes that the Debtors are targeting a February 28, 2017 Plan effective date. This oil and natural gas company filed for Chapter 11 protection on December 14, 2016, listing $1.4 billion in pre-petition assets.
Read more energy bankruptcy news.