Seventy Seven Energy pre-packaged plan of reorganization confirmed

By Caroline Salls

Pittsburgh, July 14 – Seventy Seven Energy Inc.’s pre-packaged plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the District of Delaware.

Thursday’s order also approved the disclosure statement related to the plan.

As previously reported, the plan provides for a substantial deleveraging transaction under which $1.1 billion of Seventy Seven’s outstanding debt will be converted to equity.

The restructuring plan includes the following:

• Trade creditors and other general unsecured creditors will be paid in full;

• The $650 million of 6 5/8% notes will be exchanged into 96.75% of the company’s new common stock;

• The $450 million of 6½% notes due 2022 will be exchanged for 3.25% of the new common stock plus warrants exercisable for 15% of the new common stock at predetermined equity values;

• If all classes of claims entitled to vote accepted the plan, holders of existing common stock will receive two series of warrants exercisable for 20% of the new common stock at predetermined equity values;

• The company’s existing $400 million secured term loan will be reinstated on identical terms; and

• A consent fee will be paid to term loan holders equal to 2% of the incremental term loan plus $15 million of the outstanding incremental term loan balance, together with the reinstatement of the remaining $84 million balance of the incremental term loan on identical terms other than the suspension of any prepayment premium for a period of 18 months.

Based in Oklahoma City, Seventy Seven provides wellsite services and equipment to U.S. land-based exploration and production customers. The company filed for bankruptcy on June 7 under Chapter 11 case number 16-11409.

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