DALLAS—Southcross Energy Partners LP (OTCQX: SXEE) April 1 announced that the company and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Southcross expects to continue to operate in the normal course during the court-supervised process.
Southcross intends to use the restructuring process to evaluate a range of options for the company, including a sale of the business, the divestiture of certain assets or a stand-alone restructuring plan that would strengthen the company’s financial position, accelerate future growth and enable Southcross to better serve customers. The company continues to engage in constructive discussions with its lenders and other stakeholders regarding the terms of a financial restructuring plan and is focused on achieving a resolution as expeditiously as possible.
“Over the course of the last several years, Southcross has continued to adapt to the changing and challenging market environment in which we operate, but our strong underlying business has continued to labor under a heavier debt burden than most of our competitors. Our objective is to use the restructuring process to explore a range of strategic alternatives, including a potential sale of the company, while on a parallel track, we are working to restructure our balance sheet to reduce leverage, enhance flexibility and prepare for a potential emergence as a viable, more profitable company. We are confident that these are the right steps to deliver value for the benefit of our stakeholders,” said James W. Swent III, chairman, president and CEO of Southcross.
Swent continued, “We appreciate the ongoing hard work and commitment of the entire Southcross team. I am confident our employees will continue to focus on our day-to-day operations and provide our customers the quality of service they have come to expect from Southcross. We are also grateful for the ongoing support of our vendors, suppliers and other business partners during the restructuring process.”
Southcross has received a commitment for $255 million in debtor-in-possession financing from its current lenders. Upon court approval, the new financing and cash generated from the company’s ongoing operations will be used to support the business during the reorganization and sale process.
Southcross has filed several customary motions with the U.S. Bankruptcy Court seeking authorization to operate its business in the normal course during the Chapter 11 proceedings, including the continued payment of employee wages and benefits without interruption. The company intends to pay vendors and suppliers in full under normal terms for goods and services provided on or after the filing date. In addition, Southcross is requesting court authority to pay for all goods and services delivered in the normal course of business prior to the filing. Southcross expects to receive court approval for all of these requests.
Additional information is available by calling (866) 967-0671 (U.S./Canada) or (310) 751-2671 (International). Court filings and other information related to the court-supervised proceedings are available at a website administered by the company’s claims agent, Kurtzman Carson Consultants, at www.kccllc.net/southcrossenergy.
Davis Polk & Wardwell LLP and Morris, Nichols, Arsht & Tunnell are serving as legal counsel to Southcross, Alvarez & Marsal is serving as restructuring adviser and Evercore ISI is serving as financial adviser.
Executive served for 29 years.
Industry veteran succeeds Joel Moxley.
Vanguard Natural Resources filed for Chapter 11 protection on April 1, marking the second time the Houston-based E&P has entered bankruptcy since the 2014 oil crash.