Magnum Hunter Resources filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The key element of the Plan is the agreement of the Consenting Parties to convert their pre- and postpetition funded debt Claims, including the DIP Facility Claims, Second Lien Claims, and Note Claims, into New Common Equity. Specifically, the DIP Facility Lenders shall receive their Pro Rata share of 28.8% of the New Common Equity, the Second Lien Lenders shall receive their Pro Rata share of 36.87% of the New Common Equity, and the Noteholders shall receive their Pro Rata share of 31.33% of the New Common Equity (all of which is subject to dilution by the Management Incentive Plan).”
The Disclosure Statement continues, “As part of the Restructuring Support Agreement, the Backstoppers agreed to fund a DIP Facility. The DIP Facility provides the Debtors with postpetition financing in the form of a senior secured, multidraw term loan in the aggregate principal amount of $200 million. This amount will be made available in three installments, the availability of which is tied to certain milestones set forth in the Restructuring Support Agreement and the DIP Facility, including: $40 million, which was made available upon entry of the interim order approving the DIP Facility on December 16, 2015; $100 million to be made available upon entry of a final order approving the DIP Facility, which the Debtors will seek entry of at a hearing before the Bankruptcy Court on January 11, 2016; and $60 million to be made available on or prior to the date that is one week prior to the scheduled commencement of the Confirmation Hearing, on the timeline set forth in the Restructuring Support Agreement, subject to certain conditions (the ‘Final DIP Facility Draw’).”
The Court scheduled a February 11, 2016 hearing to consider the Disclosure Statement, with objections due by February 4, 2016. Read more energy bankruptcy news.