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November 7, 2018 – PetroQuest Energy filed an emergency motion requesting authority to enter into its Restructuring Support Agreement [Docket No. 16]. The Debtors state, “After months of negotiations, the Debtors and the Consenting Creditors reached an agreement regarding the restructuring of the Debtors’ capital structure. This agreement, which is embodied in a Restructuring Support Agreement….is a true balance sheet restructuring, and provides that, upon exit from chapter 11:
- The Prepetition Term Loan Agreement shall be repaid in full from the proceeds of an exit facility. Among other things, all holders of Combined Prepetition Second Lien Notes will have the option to participate in the exit facility on a pro rata basis, with the exit facility fully backstopped by the Consenting Creditors;
- Holders of Combined Prepetition Second Lien Notes will receive (a) 100% of the new equity in the reorganized PetroQuest, subject to dilution from the management incentive plan and the backstop fee associated with the exit facility, and (b) $80 million of New Second Lien PIK Notes to be issued by reorganized PetroQuest;
- General unsecured creditors will receive their pro rata share of a $400,000 cash pool; and
- Preferred and common equity will be cancelled and receive no distribution.
- The restructuring agreed to with the Consenting Creditors contemplates an exit from chapter 11 prior to year-end and that the Debtors will continue to operate in the ordinary course of business during the chapter 11 process.”
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