Oklahoma City’s Chaparral Energy has emerged from its Chapter 11 bankruptcy with a new revolving credit as well as a new board of directors.
The company said it emerged as a private, non-SEC filing company as well and successfully completed its financial restructuring. It also managed to equitize all $300 million of its unsecured 8.75% senior notes due 2023, reduced its annual interest expense by more than $25 million and enhanced its financial flexibility.
The company said as a result of its reorganization plan, the lenders received “a full recovery of their claims through a combination of paydown and participation in an amended and restated credit facility.” Chaparral managed to operate without interruption during the course of its restructuring.
The Company also announced its new Board of Directors, comprised of the following individuals, whose
appointments are effective today:
• Craig Kelleher, co-founder of Millstreet Capital Management LLC
• Brian Connolly, co-founder of Millstreet Capital Management LLC
• Jason Hammerman, Senior Vice President at Avenue Capital Management II, LP
• Sam Barker, Portfolio Manager at Amzak Capital Management
• Mark Castiglione, Partner at Meridian Energy LLC
• Jim Addison, Chief Executive Officer of Hawkwood Energy LLC
• Chuck Duginski, Chief Executive Officer of Chaparral Energy
Advisors
The Company has bolstered its liquidity position through equitizing the Senior Notes and obtaining a $300 million exit revolving credit facility with an initial borrowing base of $175 million and a $35 million second lien convertible note.
Upon the Company’s emergence from Chapter 11, the borrowings under its first lien revolving credit agreement were partially repaid using a portion of cash on hand and the
proceeds from the $35 million second lien convertible note. The resulting liquidity position of the Company upon exit is approximately $58 million, comprised of availability under the exit facility borrowing base and approximately $10 million of cash on hand.
At emergence, each holder of Senior Notes received its pro rata share of 100% of new common equity issued by the reorganized Company, subject to terms provided under the plan of reorganization. Equity outstanding prior to the reorganization was canceled and its holders were provided consideration of $1.2
million in cash as well as warrants to acquire up to an aggregate of 10% of the restructured company or, in some cases, additional cash in lieu thereof.
Davis Polk & Wardwell LLP acted as legal counsel, Rothschild & Co and Intrepid Partners, LLC acted as investment bankers and Opportune LLP acted as financial advisor to Chaparral. Sidley Austin LLP acted as legal counsel to the Board of Directors of Chaparral in connection with the Chapter 11 cases.
Stroock & Stroock & Lavan LLP acted as legal counsel, Perella Weinberg Partners LP and Tudor, Pickering, Holt & Co. Advisors LP acted as investment banker and financial advisor to the ad hoc
committee of holders of Senior Notes in connection with the Chapter 11 cases.
Source: Chaparral Energy