California Resources Corporation (CRC) entered into an amended and restated restructuring support agreement with approximately 85% of the holders of its term loans due 2017 and 68% of the holders of its unsecured and deficiency debt claims.
As previously reported, CRC previously entered into a restructuring support agreement with Ares Management along with holders of approximately 84% of CRC’s 2017 term loans and 51% of CRC’s 2016 term loans.
Reflecting this consensus, CRC filed a plan of reorganization in its Chapter 11 case that provides for the elimination of more than $5 billion of debt and mezzanine equity interest, the consolidation of CRC’s ownership in the Elk Hills power plant and cryogenic gas plant, and the payment of all valid trade, employee, retiree, customer, vendor, regulatory and contingent claims in full in cash in the ordinary course of business.
“We are thrilled for the additional support by our key creditors, chiefly the funds holding our 2017 term loans that have played an active role in the design and negotiation of such a successful restructuring, as well as the new creditors that have joined the restructuring support agreement over the past week,” Todd A. Stevens, president and CEO of CRC, said. “There is still work to do, but CRC’s path to emergence from Chapter 11 is shorter and clearer because of the support they have provided over the past months working together collaboratively.”
CRC also closed a $1.1 billion debtor-in-possession financing, consisting of a senior secured superpriority debtor-in-possession revolving credit facility of up to $483 million, providing for $250 million in new money loans, $150 million to deem letters of credit outstanding under CRC’s existing revolving credit facility as being issued under the senior DIP facility and a “roll-up” of $83 million of commitments under CRC’s existing revolving credit facility, as well as a junior secured superpriority debtor-in-possession term loan facility of $650 million. The proceeds of the senior DIP facility and the junior DIP facility on the closing date were used to refinance and replace the company’s existing revolving credit facility in full.
CRC’s Chapter 11 case was filed in the Southern District of Texas (Houston Division). All of the transactions described above are subject to court approval. CRC will not solicit approval of its plan of reorganization unless and until a disclosure statement providing adequate information about CRC and its plan of reorganization has been approved by the court.
CRC is an oil and natural gas exploration and production company in California.
