Ascent Resources Marcellus files plan of reorganization, disclosure

By Caroline Salls

Pittsburgh, Feb. 7 – Ascent Resources Marcellus Holdings, LLC filed its pre-packaged plan of reorganization and related disclosure statement with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Ascent filed bankruptcy to implement a consensual financial restructuring approved by some holders of its first-lien and second-lien term loans.

The company said the proposed restructuring is a negotiated balance sheet restructuring being undertaken to reduce the long-term debt of, and improve the liquidity of, the Ascent Marcellus entities.

The term lenders have agreed to exchange their debt for equity under the plan.

Holders of first-lien claims will receive 96.56% of the new holding company’s equity, subject to dilution upon exercise of warrants and issuance of equity and warrants under a management services agreement, as well as new first-lien warrants and a new first-lien term loan. If a sale is completed, holders of these claims will receive sale proceeds.

Holders of second-lien claims will receive 3.44% of the new equity, subject to dilution, as well as new second-lien warrants. If a sale is completed, these creditors will receive sale proceeds.

General unsecured claims, administrative claims, priority tax claims, other priority claims and other secured claims will be paid in full in cash.

Holders of existing holding company interests will receive no distribution.

Holders of existing subsidiary debtor interests will have their interests reinstated, provided that, if a sale is completed, they will receive no distribution.

Vendors and service providers will not be impaired by the restructuring and will be paid in the ordinary course of business.

The Ascent Resources Marcellus entities, based in Oklahoma City, were formed to acquire, explore for, develop, produce and operate natural gas and oil properties in the Marcellus Shale. The companies filed for bankruptcy on Feb. 6 under Chapter 11 case number 18-10265.

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