Hammered by Prices, TransTexas Files Ch. 11
TransTexas Gas Corp. of Houston said last week, followingdiscussions with a group representing a majority of its parentcompany’s note holders, it voluntarily filed for Chapter 11bankruptcy. The company said it believes the filing will allow forcompletion of its recapitalization involving TransTexas and parent,TransAmerican Energy Corp. Details of the recapitalization plan areexpected to be filed in bankruptcy court within 30 days.
TransTexas said it expects to reach agreement with certain noteholders for debtor-in-possession financing, subject to approval bythe court. Among other capital needs, the financing will allowTransTexas to continue drilling its development areas, includingthe Eagle Bay gas field, producing fields in Wharton County, TX,and other South Texas properties.
The company believes it can improve cash flow throughdevelopment drilling in proven producing fields and, with thecommitment of its major creditors, seek court approval of arestructuring plan. Going forward TransTexas said it will pay allvendors in the ordinary course of business.
For the nine months ended Oct. 31, 1998, including the effect ofasset impairments of $186.7 million, TransTexas reported a net lossof $155.4 million on revenues of $137.7 million compared to netincome of $247 million on revenues of $695 million for the year-agoperiod, which included a gain of $540.4 million on the sale of thecompany’s Lobo Trend subsidiary.
Joe Fisher, Houston
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