Superior Energy Services Inc. moved forward with restructuring plans on Dec. 7, filing a “pre-packaged” Chapter 11 petition in the Southern District of Texas along with 16 affiliates.
The Houston-based oilfield services company reached an agreement with approximately 85% of its $1.3 billion senior unsecured notes for a reorganization plan that it said would eliminate all its funded debt and related interest costs.
Superior, which provides drilling, completion and production-related services worldwide, announced the plan of reorganization in September after entering into a restructuring support agreement with its lenders. Under the plan, the noteholders would receive 100% of the equity to be issued and outstanding by the reorganized company in exchange for discharging $1.3 billion of unsecured claims arising under the senior notes.
“Since the initial announcement of our planned recapitalization initiative in September, we have been encouraged by the growing consensus of the noteholders that have agreed to support the plan, as well as the ongoing strong backing and support provided by our customers and lenders,” said David Dunlap, president and CEO of Superior.
Dunlap added he expects Superior to “quickly” emerge from the Chapter 11 cases in early 2021.
By filing for Chapter 11, Superior joins a wave of North American oilfield service companies that have succumbed to bankruptcy during the COVID-19 pandemic. So far in 2020, 54 service companies have filed for bankruptcy, according to Haynes and Boone LLP in an Oct. 31 report.
In the company release on Dec. 7, Superior said it intends to operate its businesses and facilities without disruption to its customers, vendors, and employees during the bankruptcy process. The company also plans to obtain a $120 million debtor-in-possession letter of credit facility, which is subject to approval by the bankruptcy court, to support its continuing business operations.
Ducera Partners LLC and Johnson Rice & Co. LLC are acting as financial advisers for Superior. Latham & Watkins LLP and Hunton Andrews Kurth LLP are providing legal counsel and Alvarez & Marsal is serving as its restructuring adviser.
Evercore LLC is acting as financial advisor for an ad hoc group of noteholders with Davis Polk & Wardwell LLP and Porter Hedges LLP serving as legal counsel.
FTI Consulting Inc. is acting as financial adviser for the agent for the company’s secured asset-based revolving credit facility with Simpson Thacher & Bartlett LLP acting as legal counsel.
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