Oklahoma City-based Templar Energy LLC and its affiliates announced on Monday that it has reached an agreement with most of its lenders to restructure $1.45 billion in debt and reorganize the company, according to a report by The Oklahoman.
Under terms of the restructuring support agreement, the $1.45 billion in debt would be converted into equity in the reorganized company, which also would raise $365 million in cash from preferred equity.
Templar also said it has secured an amended credit facility with a borrowing base of $600 million, according to The Oklahoman.
“Management is extremely pleased with the outcome of the company’s negotiations with its lenders and the terms of the contemplated restructuring, which significantly deleverages the company’s balance sheet and will allow Templar to continue to operate seamlessly in a lower commodity price environment with no impact on its customers and vendors,” said David Le Norman, President and CEO. “We will work over the next several weeks to gain support from the rest of the second-lien lenders in order to implement this transaction expediently on an out-of-court basis.”
Templar executives are now seeking formal support from its remaining lenders with the goal of avoiding bankruptcy, the company said in a statement.
“The company firmly believes that an out-of-court process will be faster and more efficient than an in-court process; however, the company has already received sufficient support from the second-lien lenders to consummate the restructuring through a prepackaged Chapter 11 proceeding, and intends to pursue that path to the extent unanimous support is not obtained,” Templar said in the statement.
The restructuring plan is expected to be completed by the end of the third quarter if a deal can be reached out of court, and by the end of the year if bankruptcy proceedings are required, the company said.
