Energy & Exploration Partners filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the Disclosure Statement, “A key element of the Plan is the conversion of a substantial portion of the Debtors’ outstanding prepetition bank and bond debt into equity in the Reorganized Debtors. Specifically, if the Plan is confirmed, (i) the Prepetition Secured Lenders will exchange their secured debt in excess of $765.3 million for their pro rata share of (a) a New Term Loan in the amount of $40 million, which will be secured by liens junior to the liens securing the Exit Facility, (b) 20% of the New Common Interests in the Reorganized Debtors (subject to dilution from the Management Incentive Plan and any exercise of the Noteholder Warrants) and (iii) the Rights offered in the Rights Offering. Noteholders will exchange their unsecured debt under the Convertible Notes in the amount of $375.0 million for their pro rata share of Noteholder Warrants exercisable for seven years into 0.7% of the New Common Interests, struck assuming a cashless exercise at an equity value equal to $195 million less the aggregate principal of debt outstanding as of the Effective Date.”
The Disclosure Statement continues, “As part of the plan settlements, the holders of General Unsecured Claims (including Junior Statutory Lien Claims and the Chesapeake Note Claim) will receive their pro rata share of $2,250,000 in cash (the ‘GUC Cash’) and certain proceeds, if any, of Assigned Estate Claims (such Assigned Estate Claims, together with the GUC Cash, the ‘Creditor Trust Assets’).”
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