C&J Energy Services’ Second Amended Joint Prepackaged Chapter 11 Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The U.S. Bankruptcy Court confirmed the Plan on December 16, 2016.
BankruptcyData’s detailed Plan Summary notes, “The Restructuring Support Agreement and Plan provide for the reorganization of the Debtors as a going concern with a deleveraged capital structure and sufficient liquidity to fund the Debtors’ post-petition business plan. The cornerstone of the reorganization contemplated by the Restructuring Support Agreement and Plan is the full equitization of the Debtors’ existing obligations under the Credit Agreement. Further, the liquidity contemplated by the Restructuring Support Agreement, including the $200 million Rights Offering and the Exit Facility will be sufficient to fund the debtors’ post-emergence operations. The Valuation Analysis estimates the Total Enterprise Value of the Reorganized Debtors to be approximately $600 million to $900 million, with a mid-point of $750 million, as of the Assumed Effective Date.”
BankruptcyData’s Plan Summary further explains, “After deducting an estimated funded debtor-in-possession financing of $75 million and adding pre-emergence Cash (net of cash payment of professional and transaction fees and certain estimated claims) of $18 million projected as of the Assumed Effective Date, the Reorganized Debtors’ mid-point estimate of Total Enterprise Value of $750 million implies a value for the New Common Stock of the Reorganized Debtors, prior to any equity investment on account of the Rights Offering, of approximately $693 million.”
A corporate release notes that through the restructuring, C&J Energy Services significantly improved its financial position by eliminating approximately $1.4 billion of debt from its balance sheet, as well as more than $80 million of annual interest expense. President and C.E.O. Don Gawick states, “The Company’s de-levered balance sheet and enhanced liquidity position is an outstanding resolution for our stakeholders, and strongly positions C&J to expand our business as the commodity price environment improves and the industry rebounds.”
The Company has entered into a new $100 million revolving credit facility and paid off outstanding amounts under its prior debtor-in-possession facility with proceeds from a $200 million equity rights offering. Combining its cash balance after emergence with the available borrowing capacity under the new credit facility, C&J Energy Services emerges from Chapter 11 protection with more than $220 million of total liquidity. In accordance with the Plan, a newly-constituted board was appointed consisting of Patrick Murray (chairman), Stuart Brightman, John Kennedy, Steven Mueller, Michael Roemer and Michael Zawadzki, in addition to Don Gawick, C&J Energy Services’ president and C.E.O.
This oil and gas industry equipment provider filed for Chapter 11 protection on July 20, 2016, listing $2.2 billion in pre-petition assets.
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