Southcross Energy plan confirmed, expects to emerge by end of January

By Caroline Salls

Pittsburgh, Jan. 27 – Southcross Energy Partners, LP’s plan of reorganization was confirmed on Monday by the U.S. Bankruptcy Court for the District of Delaware.

According to a news release, Southcross expects to emerge from Chapter 11 by the end of January.

The company said it completed the sales of its natural gas pipeline network in Corpus Christi, Tex., and pipelines and related assets in Mississippi and Alabama through the court-supervised process and strengthened its financial position by using the proceeds of the sales to significantly reduce its debt.

Additionally, in November, Southcross acquired the Lancaster Gathering and Treating System from Southcross Holdings LP.

The company said it is poised to emerge reorganized around its gathering and processing business with facilities in the Eagle Ford Shale region. Southcross’s operations now include the Lone Star and Woodsboro gas processing plants, the Bonnie View fractionation facility and the Lancaster and Valley Wells gathering and treating systems.

“The court’s confirmation of our plan positions us to emerge as a stronger, more profitable stand-alone gathering and processing business,” president and chief executive officer James W. Swent III said in the release.

“We are excited about the opportunities we see to reinvest in the business, build out our capabilities and drive growth through our complementary suite of gas gathering, processing, treating, fractionation and marketing of residue gas and NGL products.”

Upon emergence, Southcross will become a privately held company, and its units will no longer be listed on any public market.

Under the plan, administrative expense claims, priority tax claims and priority non-tax claims will be paid in full in cash.

Other secured claims will be paid in full in cash or paid in the ordinary course of business.

Holders of pre-bankruptcy term loan claims and pre-bankruptcy revolving credit facility claims will receive new common stock or a portion of the sale proceeds.

Holders of general unsecured claims, sponsor note claims, subordinated claims and existing interests will receive no distribution.

Davis Polk & Wardwell LLP and Morris, Nichols, Arsht & Tunnell LLP are serving as legal counsel to Southcross, Alvarez & Marsal is serving as restructuring adviser, and Evercore is serving as financial adviser.

Southcross, a Dallas-based midstream services company, filed bankruptcy on April 1, 2019. The Chapter 11 case number is 19-10702.

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