[Just filed. Developing story] August 12, 2022 – Altera Infrastructure L.P. and 37 affiliated debtors (fka "Teekay Offshore Partners L.P.," and together “Altera*” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case No. 22-90130 (Judge Isgur). The Debtors, "a global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada," are represented by Matthew Cavenaugh of Jackson Walker LLP. Further board-authorized engagements include: (i) Kirkland & Ellis as general bankruptcy counsel, (ii) FTI Consulting, Inc. as restructuring advisors, (iii) Evercore Group L.L.C. as financial advisors, (iv) Quinn Emanuel Urquhart & Sullivan LLP as restructuring counsel and (v) Stretto as claims agent.
*Altera's preferred units trade on the New York Stock Exchange under the symbols "ALIN PR A", "ALIN PR B" and "ALIN PR E", respectively.The Debtors are controlled by Brookfield Asset Management which purchased what was then known as Teekay Offshore in January 2020 and rebranded the acquired business as Altera.
The Debtors’ lead petition notes between 1,000 an 5,000 creditors; estimated assets between $1.0bn and $10.0bn; and estimated liabilities between $1.0bn and $10.0bn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) The Bank of New York Mellom (as Trustee for $289.2mn of unsecured bonds), (ii) Marsh Limited ($2.4mn insurance claim) and (iii) Rena Quality Group AS ($1.1mn trade claim).
In a press release announcing their Q2 2022 results, the Debtors reported revenues of $296.2mn and net loss of $40.0mn, or $(0.11) per common unit, for that quarter. The Aberdeen, Scotland-based Debtors also noted that they had opted not to make a July 15th interest payment on their 8.50% senior unsecured bonds ($276.0mn principal, maturing in July 2023) with a 30-day grace period in respect of the missed payment expiring on August 14th.
In a 6-K filed in respect of Q1 2022, the Debtors had earlier commented as to their liquidity and going concern prospects: "As at March 31, 2022, the Partnership had a working capital deficit of $381.3 million. The Partnership's working capital deficit has increased from $276.4 million as at December 31, 2021, primarily due to a $165.6 million increase in scheduled maturities and repayments of outstanding borrowings during the 12 months ending March 31, 2023, which were classified as current as at March 31, 2022, partially offset by a $59.0 million decrease in accounts payable and other.
During 2021, the Partnership completed various measures to improve its debt maturity profile and enhance its liquidity and financial flexibility, including but not limited to exchanging $769.3 million of Brookfield debt with 2022 to 2024 maturities into debt with interest paid in kind and with a 2026 maturity, discontinuing distributions on the Series A, Series B and Series E Preferred Units, issuing $180.0 million of new 2025 bonds in the shuttle tanker segment and refinancing the Petrojarl I FPSO unit. See Notes 10, 11 and 15 for additional information. While these measures improved the Partnership's liquidity position, the Partnership continues to explore its liquidity management opportunities and seek to improve and extend its debt profile….it is still critical that the Partnership will need to obtain additional sources of financing…"
About the Debtors
According to the Debtors: “Altera Infrastructure L.P. is a leading global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $3.8 billion comprised of 44 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera’s fleet is employed on medium-term, stable contracts."
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