Basic Energy Services Inc. on Friday was given the green light for its prepackaged restructuring and recapitalization plan, receiving near unanimous support from voting creditors.
The Fort Worth, TX-based oilfield services provider employs more than 3,500 people and provides services in 100 points throughout the U.S. onshore. In October the company entered into a restructuring support agreement (RSA) with lenders for a voluntary Chapter 11 bankruptcy filing in U.S. Bankruptcy Court for the District of Delaware. It has planned to exit bankruptcy before the end of the year.
"The court's confirmation of our prepackaged plan represents a critical step toward emerging from Chapter 11 and securing a bright future for Basic," said CEO Roe Patterson. The support of creditors, employees, customers and suppliers "has been integral to the successful outcome of the Chapter 11 process and we look forward to emerging as quickly as possible as a healthier company, poised to continue providing our customers with dependable, high-quality services, which are the hallmark of our company."
Among other things, the RSA equitizes more than $800 million of unsecured debt, eliminates $60 million-plus in annual cash interest and completes a new capital raise of $125 million. The plan provides for a debt-for-equity swap that is to result in its existing unsecured bond obligations being converted into equity.
Existing shareholders are to receive common stock and warrants in the reorganized company. In addition, the prepackaged plan implements agreements Basic reached with its existing secured lenders. Basic also has completed a $125 million fully backstopped rights offering of mandatorily convertible notes that would provide the company with cash to operate once it emerges from bankruptcy.
All customer, vendor and employee obligations associated with the ongoing business remain unaffected.