SandRidge Energy filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “A key element of the Plan is the agreement of the Consenting Second Lien Creditors and Consenting Unsecured Creditors to convert their prepetition funded debt Claims into New Common Stock. Specifically, the Holders of Second Lien Notes Claims will receive their Pro Rata share of 85% of the New Common Stock, as diluted by the Conversion Equity, and Holders of General Unsecured Claims, including Holders of Unsecured Senior Note Claims, will receive their Pro Rata share of 15% of the New Common Stock, as diluted by the Conversion Equity.”
The Disclosure Statement continues, “On the Effective Date, the New Building Note Purchaser shall purchase the New Building Note in exchange for the New Building Note Proceeds. The New Building Note will be subject to a marketing process and higher or otherwise better proposals. Interest under the New Building Note will be payable semi-annually as follows: (i) 6% per annum for the first year following the Effective Date; (ii) 8% per annum for the second year following the Effective Date; and (iii) 10% per annum thereafter through the maturity. From the Effective Date through the earlier of (a) September 30, 2020, (b) 46 months from the Effective Date or (c) 90 days after the refinancing or repayment of the New First Lien Exit Facility, interest under the New Building Note shall be payable in-kind and added to the principal amount of the New Building Note on each payment date; thereafter, interest shall be payable in cash.”
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