C&J Energy Services filed with the U.S. Bankruptcy Court a Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the Disclosure Statement, “The Plan contemplates, among other things, a substantial deleveraging through the conversion of the Secured Lender Claims into New Common Stock. The Plan contemplates the following key terms….Issuance of New Common Stock; All existing Interests in C&J Energy will be cancelled as of the Effective Date and Reorganized C&J Energy will issue the New Common Stock to holders of Allowed Secured Lender Claims… On the Effective Date, Reorganized C&J Energy will consummate the Rights Offering to raise the $200 million New Money Investment. Through the Rights Offering, each holder (an ‘Eligible Participant’) of an Allowed Secured Lender Claim (an ‘Eligible Claim’) shall have the opportunity, subject to the terms and conditions set forth in the Plan and the Rights Offering Procedures, to purchase the Rights Offering Shares…. Eligible Participants may purchase Rights Offering Shares pursuant to their Subscription Rights at a per share purchase price that reflects a discount of 20 percent to total settled plan enterprise value (provided, that such value shall not be greater than $750 million) in accordance with the Rights Offering Procedures. Under the terms of the Plan and the Backstop Commitment Agreement, the Backstop Parties have agreed to purchase all unsubscribed shares under the Rights Offering (the ‘Backstop Commitment Shares’). As consideration for the Backstop Parties agreeing to purchase the Backstop Commitment Shares and the related costs (including the opportunity costs), the Backstop Parties will receive, on account of their backstop commitment, a premium of five percent of the $200 million committed amount, payable in New Common Stock (to be issued at a price per share equivalent to the price of the Rights Offering Shares) on the Effective Date (the ‘Backstop Fee’). The Backstop Fee will be deemed earned upon the Bankruptcy Court’s entry of the Disclosure Statement Order. On the Effective Date, provided that Class 8 has timely accepted the Plan, the Debtors will issue the New Warrants to holders of Interests in C&J Energy….The New Warrants will have a term of seven years and be exercisable on a net-share settled basis into up to six percent of the New Common Stock at a strike price of $1.55 billion…..Exit Facility on the Effective Date, the Reorganized Debtors shall enter into the Exit Facility, which shall be a senior secured revolving asset-based lending credit facility to be arranged and provided by one or more commercial lending institutions in a minimum amount of $100 million, on the terms set forth in the Exit Facility Documents; provided that the Debtors or the Reorganized Debtors, the Backstop Parties and the Required Supporting Creditors agree that such a facility is in the best interests of the Reorganized Debtors.”
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