Halcón Resources Files for Court Approval of Prepackaged Restructuring Plan
28 July 2016 - 9:00PM
Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”),
and certain of its subsidiaries, today announced that they had
filed voluntary petitions under chapter 11 of the Bankruptcy Code
to pursue a pre‐packaged plan of reorganization in accordance with
its previously announced comprehensive balance sheet restructuring
efforts (the “Restructuring Plan”).
Under the Restructuring Plan, the Company will eliminate
approximately $1.8 billion in long-term debt and will reduce annual
interest expense by more than $200 million. The Restructuring Plan
also provides that existing holders of Halcón common stock will
receive 4.0% of the common stock of the reorganized Company
(subject to dilution set forth in the Restructuring Plan).
The bankruptcy filing follows Halcón’s successful solicitation
for support of the Restructuring Plan from the Company's 13.0% 3rd
Lien Notes due 2022 (the “3L Notes”), its three tranches of senior
unsecured notes comprised of its 9.75% Senior Notes due 2020, its
8.875% Senior Notes due 2021, and its 9.25% Senior Notes due 2022
(collectively, the “Unsecured Notes”), its 8.0% Convertible Note
due 2020 (the “Convertible Note”) and its 5.75% Series A Perpetual
Convertible Preferred Stock (the “Preferred Equity”, and together
with the 3L Notes, Unsecured Notes and Convertible Note, the
“Affected Stakeholders”). This solicitation resulted in
overwhelming support for the Restructuring Plan with the Company
having received acceptances from more than 95% in number and over
99% in aggregate amount of claims and interests in each Affected
Stakeholder class that voted on the Plan. In addition, as
previously announced, Halcón also reached an agreement with holders
of more than 51% in aggregate principal amount of its 8.625% and
12.0% 2nd Lien Notes due 2020 and 2022 regarding certain amendments
to the indentures governing such notes in exchange for the
commitment of such holders to support the Restructuring Plan.
On July 25, 2016 the Company partially drew down its revolving
credit facility and therefore currently has $359 million in cash on
hand. On July 27, 2016, Halcón received a commitment from certain
lenders in its existing reserve-based credit facility, led by JP
Morgan and Wells Fargo, to provide the Company with a $600 million
debtor in possession credit facility (the “DIP”) with $500 million
of availability once the interim order approving the DIP is
received from the bankruptcy court. Halcon plans to repay
outstanding amounts due on its existing revolver once the DIP is
approved by the court. The DIP facility will convert into a
reserve-based revolving credit facility (the “Exit Facility”) with
availability of $600 million upon emergence from bankruptcy.
Halcón’s current cash on hand in addition to the commitment for the
DIP and Exit Facility provides the Company with ample liquidity
both during and after the restructuring process.
The Company has been in contact with the New York Stock Exchange
(“NYSE”) and anticipates the continued listing of its common stock
on the NYSE throughout the bankruptcy process so long as the
Company continues to meet the minimum continued listing standards
set forth by the NYSE.
The Restructuring Plan is expected to conclude in approximately
45-60 days. The Company plans, subject to approval by the
Bankruptcy Court, to continue to pay vendors, royalty owners and
other parties in ordinary course throughout the bankruptcy
process.
Halcón filed its voluntary chapter 11 petitions and pre‐packaged
plan in the U.S. Bankruptcy Court for the District of Delaware in
Wilmington. Information about the cases can be found on
http://dm.epiq11.com/Halcon. The Company has also posted FAQs and
other restructuring information on its website at
http://www.halconresources.com.
PJT Partners is serving as Halcón’s financial advisor and Weil,
Gotshal & Manges, LLP is acting as legal advisor to the Company
in relation to the Restructuring Plan.
About Halcón Resources
Halcón Resources Corporation is an independent energy company
engaged in the acquisition, production, exploration and development
of onshore oil and natural gas properties in the United States.
For more information contact Quentin Hicks, Senior Vice
President of Finance & Investor Relations, at 832-538-0557 or
qhicks@halconresources.com.
Forward-Looking Statements
This release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements that are not strictly historical
statements constitute forward-looking statements and may
often, but not always, be identified by the use of such
words such as "expects", "believes", "intends", "anticipates",
"plans", "estimates", "potential", "possible", or "probable"
or statements that certain actions, events or results "may",
"will", "should", or "could" be taken, occur or be achieved.
Forward-looking statements are based on current beliefs
and expectations and involve certain assumptions or
estimates that involve various risks and uncertainties
that could cause actual results to differ materially from
those reflected in the statements. These risks include, but are not
limited to, the ability to confirm and consummate a plan of
reorganization in accordance with the terms of the restructuring
support agreement; risks attendant to the bankruptcy process,
including the effects thereof on the Company’s business and on the
interests of various constituents, the length of time that the
Company might be required to operate in bankruptcy and the
continued availability of operating capital during the pendency of
such proceedings; risks associated with third party motions in any
bankruptcy case, which may interfere with the ability to confirm
and consummate a plan of reorganization, potential adverse effects
on the Company's liquidity or results of operations; increased
costs to execute the reorganization, effects on market price of the
Company's common stock and on the Company's ability to access the
capital markets, and the risks set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2015 and
other filings submitted by the Company to the SEC, copies
of which may be obtained from the SEC's website at
www.sec.gov or through the Company's website
at www.halconresources.com. Readers should not place undue
reliance on any such forward-looking statements, which are made
only as of the date hereof. The Company has no duty, and
assumes no obligation, to update forward-looking statements as
a result of new information, future events or changes
in the Company's expectations.
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