Triangle USA Petroleum (TUSA) filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing and approving (i) (a) entry into the backstop commitment agreement and (b) payment of certain fees and expenses and (ii) the rights offering procedures and related forms.
The motion explains, “As outlined in the Term Sheet, the Backstop Investors, who are members of the Ad Hoc Noteholder Group and collectively hold a substantial amount of the Senior Notes, have agreed to backstop up to approximately $150 million of the Rights Offering….The Backstop Commitment Agreement Requires that, on or before the earlier of January 15, 2017 or entry of an order approving the Disclosure Statement, TUSA obtain a Bankruptcy Court order authorizing the Company to execute the Backstop Commitment Agreement.”
In addition, “The Approval Order shall be acceptable to each Backstop Investor and shall provide that the Backstop Investors will be entitled to receive (i) reimbursement of the reasonable and documented advisor fees and expenses related to the restructuring on a current basis and any indemnification obligations of the Backstop Investors incurred in connection with TUSA’s chapter 11 case and (ii) a fee in cash equal to, in the aggregate, (a) 6.0% of the Backstopped Amount of Financing (the ‘Commitment Fee’), which shall be payable on the Closing Date, or (b) in the event the Company or any of the TUSA Debtors enters into an Alternative Transaction, the greater of (x) 3.25% of Total New Equity or (y) $5.25 million (the ‘Alternative Transaction Fee’), which shall be payable on the date New TUSA HoldCo or any of the TUSA Debtors enters into such Alternative Transaction.”
The motion continues, “Consistent with the Term Sheet and pursuant to the Backstop Commitment Agreement, the Debtors will pay the Backstop Investors the Commitment Fee totaling $9 million, which is 6% of the backstopped amount of the Rights Offering, upon the Closing Date….The Alternative Transaction Fee is only payable upon TUSA’s entry into an Alternative Transaction and is equal to the greater of (a) 3.25% of Total New Equity or (b) $5.25 million.”
The Court scheduled a January 13, 2017 hearing, with objections due by January 6, 2017.
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