Exco Resources completes restructuring, emerges as private company

By Caroline Salls

Pittsburgh, July 1 – Exco Resources, Inc. completed its financial restructuring and emerged from Chapter 11 bankruptcy on Monday having reduced its leverage by more than $1.1 billion, according to a company news release.

Exco said it is moving forward with $325 million in committed exit financing from a new credit facility, providing significant financial flexibility to support ongoing operations and investment in the business.

Under its plan of reorganization, which was confirmed on June 18 by the U.S. Bankruptcy Court for the Southern District of Texas, holders of 1.5-lien notes claims will receive a share of 61.2% of the company’s new common stock before giving effect to a secured lender settlement.

Holders of 1.75-lien term loan facility claims will receive a share of 38.8% of the new common stock.

Holders of second-lien term loan facility claims, unsecured note claims and general unsecured claims will receive a share of new common stock, unsecured claims distribution beneficial interests, if applicable, any challenge action recovery and the settlement contribution hold-back remaining after repayment of any unsecured claims distribution trust loan.

Holders of convenience claims will receive a share of $1.1 million in cash, provided that no creditor in this class will receive a distribution in excess of 20% of their allowed claim.

The company said all potential claims and causes of action against insured parties and settling lenders will be settled, and the unsecured claims distribution trust will prosecute secured claim challenges against non-settling 1.5-lien notes and 1.75-lien facilities claims.

Existing interests in Exco will be deemed cancelled, and holders will receive no distribution.

The company said it will continue to engage in the exploration, acquisition, development and production of onshore U.S. oil and natural gas properties with a focus on shale resource plays in key basins in Texas, Louisiana and the Appalachia region.

“This is an exciting day for Exco and marks the beginning of the next chapter as an even stronger, more competitive company,” chief executive officer and president Hal Hickey said in the release.

“Through the restructuring process, we have significantly improved our capital structure and reduced our debt, and our operations have progressed uninterrupted.

“Exco is now better positioned to capitalize on our strong asset base and operational expertise as we continue enhancing our business and serving our customers, partners and other stakeholders.”

The company said it is now privately owned, and its shares are no longer available for trading on a public exchange.

The current management team remains in place, the release said. In accordance with its restructuring plan, Exco’s new five-member board includes representatives from the holders of its newly issued common stock. The new board includes Rick Doman, David Dunn, Peter Furlan, Bill Transier and C. John Wilder.

Kirkland & Ellis LLP served as Exco’s legal adviser in connection with the restructuring. Alvarez & Marsal North America, LLC served as its restructuring adviser, and PJT Partners LP served as its financial adviser.

Exco is a Dallas-based oil and gas exploration and production company operating in Texas, North Louisiana and Appalachia. The company filed for bankruptcy on Jan. 15, 2018 under Chapter 11 case number 18-30155.

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