Superior Energy plan confirmed; $1.3 billion debt to convert to equity

By Sarah Lizee

Olympia, Wash., Jan. 19 – Superior Energy Services, Inc.’s Chapter 11 plan of reorganization was confirmed Tuesday by the U.S. Bankruptcy Court for the Southern District of Texas, according to a press release.

Under the plan, the company’s $1.3 billion in debt will be converted into equity and the company will emerge debt-free.

Superior entered the Chapter 11 cases with the support of holders of about 85% of its $1.3 billion of senior unsecured notes, as previously reported.

Under the plan, the noteholders will receive 100% of the equity to be issued and outstanding by the reorganized company in exchange for discharging $1.3 billion of unsecured claims arising under the senior notes.

Some members of the ad hoc noteholder group agreed to provide up to $200 million in a four-year delayed-draw term loan exit facility to the company.

The loan will bear interest at Libor plus 975 basis points, subject to a 1% Libor floor.

After the first year, the loan will amortize in equal quarterly installments in an amount equal to 1% per annum of the aggregate principal amount of term loans outstanding on the earlier to occur of the first anniversary of the closing date and the date that the delayed-draw term loan facility is fully drawn.

According to the disclosure statement, each holder of allowed DIP super-priority claims will receive payment in full in cash from the proceeds of exit facilities.

Each holder of an allowed pre-petition credit agreement claim will have their claims 105% cash collateralized, in respect to letters of credit, and deemed outstanding under the exit ABL facility.

Each holder of a pre-petition notes claim against the parent will receive its pro rata share of the $125,000 parent GUC recovery cash pool, provided that the holders of the pre-petition notes claims against the parent will waive any distribution from the parent GUC recovery cash pool.

Each holder of a general unsecured claim against the parent will receive its pro rata share of the $125,000 parent GUC recovery cash pool.

Each holder of an allowed pre-petition notes claim against any affiliate debtor will receive its pro rata share of the cash payout, which is equal to 2% of the principal due under the pre-petition notes held by all cash payout noteholders, or, to the extent that a holder elects to be a cash opt-out noteholder, they will receive 100% of the new common stock pool, subject to dilution on account of the new management incentive plan equity, and, to the extent that holder is an accredited cash opt-out noteholder, subscription rights.

Intercompany claims will be adjusted, reinstated, compromised or canceled, whichever is acceptable to the required consenting noteholders in consultation with the company.

Old parent interests will be discharged and terminated without any distribution.

Intercompany equity interests will remain effective and will be held or owned by the same applicable person or entity that held or owned the interests prior to the effective date.

The 510(b) equity claims will be discharged and terminated without any distribution.

The rights of the holders of allowed other priority claims, other secured claims and secured tax claims will be unaltered by the plan.

Based in Houston, Superior Energy provides oil field services and equipment. The company filed Chapter 11 bankruptcy on Dec. 7 under case number 20-35812.

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