Weatherford second amended reorganization plan confirmed

By Caroline Salls

Pittsburgh, Sept. 11 – Weatherford International plc’s second amended pre-packaged plan of reorganization was confirmed on Wednesday by the U.S. Bankruptcy Court for the Southern District of Texas.

The company announced on Tuesday that it had entered into an amended restructuring support agreement to account for the issuance of $2.1 billion in exit notes and an amended backstop commitment agreement that increases the commitment amount to $1.6 billion from $1.25 billion.

Under the restructuring support amendment, which was agreed by the Weatherford parties and some of its noteholders, the Weatherford parties will issue a single tranche of up to $2.1 billion principal amount of new unsecured exit notes upon emergence from bankruptcy, consisting of up to $1.6 billion of exit notes issued for cash to holders of subscription rights and $500 million issued to holders of unsecured notes claims.

Weatherford said the exit notes will be issued in lieu of the two tranches of new unsecured notes in the total principal amount of $2.5 billion previously contemplated by the original support agreement.

The exit notes will bear interest at a rate of 11%.

In exchange for the increased backstop commitment, the Weatherford parties will make an $18.7 million non-refundable cash payment to some of the commitment parties.

As previously reported, the company’s existing secured funded debt and unsecured revolving credit facility debt will be repaid in full in cash.

Existing equity will be canceled and exchanged for 1% of the new common stock in the reorganized company and three-year warrants to purchase 10% of the new common stock at a strike price that will be set at an equity value at which the consenting creditors would receive a recovery equal to par plus accrued interest as of the date of the bankruptcy filing.

Weatherford is an oilfield services company based in Baar, Switzerland. The company filed bankruptcy on July 1 under Chapter 11 case number 19-33694.

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