Oklahoma City-based Seventy Seven Energy Inc. announced it has filed a pre-packaged plan for Chapter 11 bankruptcy in the Bankruptcy Court for the District of Delaware. In doing so, the company said the plan provides for a substantial deleveraging transaction pursuant to which nearly $1.1 billion of the company’s outstanding debt will be converted to equity.
The solicitation process, according to the Tuesday announcement started May 9 and was completed with lenders representing the company’s $400 million Term Loan credit agreement dated June 25, 2014, noteholders of the company’s 6.625% senior unsecured notes due 2019 and noteholders of the 6.50% senior unsecured notes due 2022.
Company leaders indicated the solicitation process “resulted in overwhelming approval of the pre-packaged plan presented by the company.”
“The successful completion of the solicitation process and today’s filing represent the next step forward in our financial restructuring,” said Jerry Winchester, Chief Executive Officer. “The support of all of our stakeholders will allow our Company to expedite the reorganization process and maximize our operational strengths and assets to grow our business as the market recovers.”
He said a key part of the plan is that all trade creditors, suppliers and contractors will be paid in the ordinary course of business.
