Gulfport receives confirmation of Chapter 11 plan of reorganization

By Sarah Lizee

Olympia, Wash., April 28 – Gulfport Energy Corp.’s Chapter 11 plan of reorganization was confirmed Tuesday by the U.S. Bankruptcy Court for the Southern District of Texas, according to a docket entry.

Through the plan, the debtors will substantially deleverage their balance sheet, reducing funded debt and letters of credit by over $1.4 billion, and reduce annual interest expense by over $86 million on a go-forward basis.

The plan provides for $580 million in exit financing commitments from existing revolving credit facility lenders and a $50 million rights offering fully backstopped by an informal group of noteholders.

Specifically, the revolver lenders, with the Bank of Nova Scotia as administrative agent, provided a $262.5 million debtor-in-possession facility that rolled up a portion of the existing revolver and provided liquidity for the debtors to operate while in Chapter 11. The revolver lenders agreed that the revolver and the DIP facility will convert into the $580 million of exit facilities, which will mature in 2024 and bear interest at Libor plus 300 basis points to 400 bps, based on borrowing base use.

Under the plan, holders of other secured claims will receive payment in full in cash, the collateral securing their claims or reinstatement of their claims.

Holders of other priority claims will receive payment in full.

If holders of RBL claims elect to participate in the exit revolver and term loan A facility, they will receive their pro rata share of the facilities. Otherwise, they will receive their pro rata share of the exit term loan B facility.

Holders of general unsecured claims against the Gulfport parent will receive their pro rata share of the Gulfport parent equity pool, which is 4% of all new common stock; the $10 million Gulfport parent cash pool and the Mammoth Energy Services, Inc. shares. However, once all holders have received a 100% recovery, then any excess value will be reallocated.

To the extent the claims exceed $5 million, 50% of the excess value will go to the unsecured claims distribution trustee for holders of convenience claims, until they’ve been paid in full, up to the $300,000 convenience claim threshold. The remaining 50% will be transferred to the reorganized debtors, with any new common stock that is a portion of the remaining 40% being canceled instead of transferred.

Then, any remaining share off new common stock in the Gulfport parent equity pool will be canceled and other remaining property held by the unsecured claims distribution trust will be transferred to the reorganized debtors.

Holders of general unsecured claims against the Gulfport subsidiaries will receive their pro rata share of the Gulfport subsidiaries equity pool, which is 96% of all new common stock; rights offering subscription rights; and $550 million of new unsecured notes.

Holders of convenience claims will receive their pro rata share of the $3 million convenience claims distribution pool.

Holders of note claims against the Gulfport parent will receive their pro rata share of the Gulfport parent equity pool.

Holders of notes claims against the Gulfport subsidiaries will receive their pro rata share of the Gulfport subsidiaries equity pool, rights offering subscription rights and new unsecured notes.

Holders of intercompany interests will receive no recovery.

Existing Gulfport parent interests and section 510(b) claims will be canceled.

Gulfport is a natural gas and oil company based in Oklahoma City. The company filed Chapter 11 bankruptcy on Nov. 13 under case number 20-35562.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.