Philadelphia Energy Solutions, the 10th largest refiner in the U.S., filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware.
PES Holdings is the parent of all subsidiaries that filed, including Philadelphia Energy Solutions Refining and Marketing. Philadelphia Energy Services is not included in the U.S. Bankruptcy Court filing. The prepackaged plan relieves debt maturities through 2022, and PES Holdings noted its intention to sell all of its assets, pursuant to Section 363(f) of the Bankruptcy Code. The company is owned by The Carlye Group and is a subsidiary of Energy Transfer Partners.
According to the court filing, Courtland Capital is acting as administrative agent for $120 million DIP financing.
Other key terms of the company’s proposed restructuring include the following:
- An equitization of $107 million of the debtors’ term loan B debt
- The $120 million new money post-petition financing facility will convert into the senior most tranche of an exit facility rather than be repaid upon emergence
- A $65 million contribution by the parent in exchange for, among other things, a 25% equity interest in the reorganized debtors
- A $75 million new loan from the additional financing lender
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PES Holdings hopes to receive a U.S. Bankruptcy Court confirmation order for its joint prepackaged plan by February 23, 2018.
Philadelphia Energy Solutions launched in 2012 as a result of a partnership between The Carlyle Group and Sunoco.
Kirkland & Ellis as is acting as legal advisor, PJT Partners as investment banker and Alvarez & Marsal as restructuring advisor.
