Advertisement

Seventy Seven Energy Plan Effective

Advertisement

Seventy Seven Energy’s Joint Prepackaged Chapter 11 Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on July 14, 2016.

According to a corporate release, this balance sheet restructuring has resulted in the conversion of approximately $1.1 billion of pre-petition debt into equity. Jerry Winchester, Seventy Seven Energy’s chief executive officer, states “We will now be able to focus completely on maximizing our operational strengths and assets to grow our business as the market recovers. We are very enthusiastic about the future of the Company.” According to documents filed with the Court, “The key components of the Plan are as follows: Holders of Allowed General Unsecured Claims…will not be affected by the filing of the Chapter 11 Cases and, subject to Bankruptcy Court approval, are anticipated to be paid in full in the ordinary course of business.”

Court-filed documents continue, “Holders of Allowed Term Loan Claims will receive (i) their Pro Rata share of the Term Loan Payment; and (ii) continue to hold their Pro Rata share of Term Loans under the Term Loan Credit Agreement….Holders of Allowed Incremental Term Loan Claims will receive their Pro Rata share of (i) the Incremental Term Loan Payment, and (ii) $15 million of the outstanding Incremental Term Loan balance….Holders of Allowed OpCo Notes Claims will receive their Pro Rata share of 96.75%, or if Class 13 (HoldCo Notes Claims) does not vote to accept the Plan, 98.67%, on a fully diluted basis (subject only to the New Warrants and any securities issued under the Management Incentive Plan) of the New HoldCo Common Shares outstanding as of the Effective Date. Holders of Allowed HoldCo Notes Claims will receive their Pro Rata share of 3.25% on a fully diluted basis (subject only to the New Warrants and any securities issued under the Management Incentive Plan) of the New HoldCo Common Shares outstanding as of the Effective Date plus warrants exercisable 15% of the New HoldCo Common Shares at a share price based on a total equity value of $524 million, or if Class 13 HoldCo Notes Claims does not vote to accept the Plan, 1.33% on a fully diluted basis (subject only to the New Warrants and any securities issued under the Management Incentive Plan) of the New HoldCo Common Shares outstanding as of the Effective Date. Existing HoldCo Interests shall be cancelled and discharged and shall be of no further force or effect.”

The Company anticipates that its common stock will be traded over the counter pending listing on a major exchange at some point in the future. This oil and gas well site services and equipment provider filed for Chapter 11 protection on June 7, 2016, listing $2 billion in pre-petition assets. Read more energy bankruptcy news.