Oklahoma City’s Mammoth Energy Services Inc. says a Title III Court judge has approved a settlement agreement the company reached regarding a fight over delayed payments from Puerto Rico for the firm’s power restoration work following 2017 Hurricane Maria.
The settlement was with the Puerto Rico Electric Power Authority (PREPA) and won approval from Judge Laura Taylor Swain. Under the agreement, Mammoth’s subsidiary, Cobra Acquisitions LLC will receive $188.4 million and $150 million is to be paid within ten days of the court approval.
Mammoth’s announcement explained the remaining $38.4 million relates to funds PREPA received from the Federal Emergency Management Agency, but are currently withholding and are to be paid out according to the terms of the Settlement Agreement.
“We are pleased with the results of the omnibus hearing and are happy to have received approval of the Settlement Agreement. We look forward to receiving the money owed to us for work completed over five years ago,” stated Arty Straehla, Chief Executive Officer.
“These proceeds will allow us to pay off all outstanding amounts under our term credit facility, together with accrued and unpaid interest, and terminate the facility. We expect that the remaining proceeds from the Settlement Agreement will result in cash on our balance sheet, which we believe will have a transformative impact on our business going forward.”
Settlement Agreement Terms
The proceeds of the Settlement Agreement will be paid to Cobra through three installments: (i) $150.0 million on the later of (A) ten business days following approval of the Settlement Agreement by the Title III Court and (B) August 31, 2024; (ii) $20.0 million within seven days following the effective date of PREPA’s plan of adjustment; and (iii) $18.4 million in the Withheld FEMA Funds within either (A) ten business days after the deadline for appealing the entry of the settlement order by the Title III Court under the applicable bankruptcy rules of procedure if no such appeal is filed, or (B) if the provisions of the settlement order allowing PREPA to release the Withheld FEMA Funds to Cobra without retaining any liability to the Specified Municipalities are appealed by the Specified Municipalities, within ten business days of the filing of the notice of such appeal.
Source: Mammoth release