Delta Petroleum, Now Renamed Par Petroleum, Exits Chapter 11
Delta Petroleum Corporation, now renamed Par Petroleum Corporation, announced that it has consummated its third amended plan of reorganization with Laramie Energy II, LLC as the sponsor.
The implementation of the plan, as confirmed by the U.S. Bankruptcy Court on August 16, 2012, marks the conclusion of the company’s financial restructuring, and the emergence of Delta and eight subsidiaries (including Amber Resources Company of Colorado) from Chapter 11. Delta and Amber’s previously outstanding common stock has been cancelled, and will no longer be traded. In conjunction with the reorganization, Delta has been renamed Par Petroleum Corporation.
At closing, Laramie and Par Petroleum contributed their respective assets in Mesa and Garfield counties, Colorado, to form a new joint venture called Piceance Energy. Laramie and Par Petroleum hold 66.66% and 33.34% ownership interests in Piceance Energy, respectively. Subsequently, Piceance Energy entered into a new $140 million credit agreement, and distributed approximately $74.1 million to Par Petroleum and $24.8 million to Laramie. The distributions are subject to adjustment per the joint venture transaction effective date of July 31, 2012.
As part of the company’s reorganization, $265 million in unsecured notes were converted into equity. The Zell Credit Opportunities Master Fund, L.P., an affiliate of Equity Group Investments, and clients of Whitebox Advisors played a leading role in the restructuring process and are now the two largest equity holders in Par Petroleum. Affiliates of the two firms are also the two largest lenders under Par Petroleum’s new $30 million delayed draw term facility, $13 million of which has been drawn down. Par Petroleum will use the $74.1 million distribution and the exit facility to pay bankruptcy expenses, secured debt, the debtor-in-possession loan, priority claims and to fund two litigation trusts.
Following the closing, Par Petroleum retained its interest in the Point Arguello unit offshore California, other miscellaneous assets and certain tax attributes, including significant net operating losses. As part of consummating the Plan, Par Petroleum issued new common stock for distribution to holders of allowed pre-petition claims. The new common stock will be publicly traded on the over-the-counter (OTC) market. Delta’s shareholders prior to Chapter 11 emergence will not receive any consideration under the plan.
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