C&J Energy Services and 14 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 16-33590 (CJ Holding). The Company, which provides completion and production services for the oil and gas industry, is represented by Stephen Thomas Schwarzbach, Jr. of Kirkland & Ellis.
The reorganization cases contemplate implementing the Company’s previously announced restructuring support agreement (RSA) that C&J Energy Services executed with its lenders, which provides for the elimination of approximately $1.4 billion in debt from the Company’s balance sheet. Additionally, the RSA contemplates that, subject to the satisfaction of certain conditions, the Company will issue one series of seven-year warrants to existing common stockholders, based on their pro rata share, exercisable for up to an aggregate of 6% of new common stock at a strike price of $1.55 billion. Currently, lenders that beneficially own or manage greater than 83% of the aggregate principal amount of debt outstanding under the Company’s credit facilities are parties to the RSA.
The Company currently estimates that it will emerge from the Chapter 11 reorganization within approximately 130 to 180 days, and fully expects operations to continue as normal throughout the court-supervised financial restructuring process.
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