Endeavour files reorganization plan consistent with support agreement

By Kali Hays

New York, Nov. 18 – Endeavour International Corp. filed a joint Chapter 11 plan of reorganization and related disclosure statement on Monday with the U.S. Bankruptcy Court for the District of Delaware, according to an 8-K filed with the Securities and Exchange Commission.

The plan is based on the company’s approved restructuring and support agreement entered into on Oct. 10 with holders of more than two-thirds of its notes.

According to the proposed disclosure statement, the plan provides for the reduction of about $598 million of Endeavour’s existing debt and about 43% of its annual interest obligations.

The reductions will provide for $50 million in annual cash flow “that can be used for reinvestment in the debtors’ business.”

As previously reported, the restructuring parties agreed that the existing company notes will all be canceled and Endeavour will issue $262.5 million of new 9¾% notes to the holders of its existing 12% first-priority notes due 2018, $237.5 million of new 3½% convertible preferred shares to holders of its 12% first-priority notes and 12% second-priority notes due 2018, and common shares to holders of its 12% second-priority notes, 7½% convertible bonds, 6½% convertible notes due 2016 and 5½% convertible notes due 2016.

All of the existing equity, including common stock and preferred stock, will be canceled, and equity holders will receive no distribution.

Endeavour Energy UK Ltd.’s $440 million senior secured term loan will not be affected by the restructuring.

Plan terms

Specific treatment of creditors under the plan include the following:

•Holders of priority non-tax claims and convenience claims will receive full payment in cash;

•Holders of other secured claims will receive full payment in cash or a full reinstatement of claims;

•Holders of notes due March 2018 will receive $262.5 million of new notes due 2020 and 82.57% of new preferred stock, equal to a $196.1 million liquidation preference, convertible into 66.3% of new common stock;

•Holders of notes due June 2018 will receive 17.43% of new preferred stock, equal to a liquidation preference of $41.1 million, convertible to 14% of new common stock and 2.74% of new common stock;

•Holders of 7½% convertible bonds will receive 8.72% of new common stock;

•Holders of convertible notes will receive 8.24% of new common stock;

•Holders of general unsecured claims will receive a cash payment equal to 15% of an allowed claim and;

•Holders of series C and series B preferred interests and other company interests will receive no distribution under the plan.

A hearing to approve the disclosure statement is scheduled for Dec. 17.

Endeavour is a Houston-based oil and gas exploration and production company focused on the North Sea and the United States. The company filed for bankruptcy Oct. 10 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 case number 14-12308.

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