The U.S. Bankruptcy Court approved Basic Energy Services’ Disclosure Statement and concurrently confirmed the First Amended Joint Prepackaged Chapter 11 Plan of Reorganization.
In a corporate release, the Company notes that its Plan equitizes more than $800 million of unsecured debt, eliminates more than $60 million in annual cash interest and completes a new capital raise of $125 million. Specifically, the Plan provides for a debt-for-equity swap that will result in the Company’s existing unsecured bond obligations being converted into equity.
Existing shareholders will receive common stock and warrants in the reorganized Company. Basic Energy Services has also completed a $125 million fully backstopped rights offering of mandatorily convertible notes (totaling $131.25 million principal amount of notes including the backstop put premium), which will close on the effective date of the Plan and provide the Company with the cash it needs to operate successfully once it emerges from bankruptcy.
Roe Patterson, Basic Energy Services’ president and C.E.O., comments, “The court’s confirmation of our Prepackaged Plan represents a critical step towards emerging from chapter 11 and securing a bright future for Basic. Basic is thankful for the continued support of our creditors, employees, customers and suppliers.” This well site services provider filed for Chapter 11 protection on October 25, 2016, listing $1.2 billion in pre-petition assets.
Read more energy bankruptcy news.