Altera Infrastructure and certain of its subsidiaries, a supplier of infrastructure assets to the offshore energy industry, emerged from the Chapter 11 process in the United States Bankruptcy Court for the Southern District of Texas after successfully consummating its Chapter 11 plan of reorganization.
The restructuring, which was consummated approximately five months after the Chapter 11 cases were commenced, addressed more than $1 billion of secured and unsecured holding company debt, $400 million of preferred equity and $550 million of secured asset-level bank debt (including unsecured guarantees of such debt issued by Altera Infrastructure). With the support of substantially all of Altera’s lenders, including Brookfield Business Partners, and certain of its affiliates and institutional partners, the restructuring comprehensively reprofiled Altera’s bank loan facilities to better align cash flow with debt service obligations and equitized more than $1 billion in junior debt obligations.
The restructuring also enabled Altera to reach an agreement with Equinor UK Limited for a bareboat charter in respect of the Petrojarl Knarr FPSO vessel — the debtors’ most significant asset, which served as one of the key drivers in the restructuring. The asset is set to be deployed for the Rosebank field development project, pending final investment decision and regulatory approvals. The Equinor contract is firm for nine, with options up to a total of 25 years. The contract also provides liquidity for substantial capex upgrades to the FPSO. As such, the Equinor Contract allows Altera to utilize the Petrojarl Knarr FPSO to generate significant cash flows and value to the business.
“We are pleased to announce the consummation of our financial restructuring. Our goal was to better position Altera for growth and a sustainable future, and the restructuring has done just that,” Ingvild Sæther, president and CEO of Altera Infrastructure Group, said. “We are grateful for the support that our lenders and bondholders, including Brookfield Business Partners, has demonstrated throughout this process. Our employees, customers and vendors are of the utmost importance to us, and we are committed to continue to develop sustainable solutions for the industry in the years ahead. We are very excited for what is to come for Altera.”
Kirkland & Ellis is serving as the company’s restructuring counsel, Jackson Walker is serving as local counsel, FTI Consulting is serving as financial advisor, Evercore is acting as investment banker and Stretto is acting as claims and noticing agent.
