Alvarez & Marsal served as restructuring advisor to Superior Energy Services in the company’s financial restructuring and commencement of its Chapter 11 case. Superior serves drilling, completion and production-related needs of oil and gas companies.
Superior entered the Chapter 11 cases with the support of holders of approximately 85% of its $1.3 billion of senior unsecured notes. Subject to the bankruptcy court’s approval, under the plan, the noteholders would receive 100% of the equity to be issued and outstanding by the reorganized company in exchange for discharging $1.3 billion of unsecured claims arising under the senior notes. As a result, the plan would eliminate all of the company’s funded debt and related interest costs.
“Since the initial announcement of our planned recapitalization initiative in September, we have been encouraged by the growing consensus of the noteholders that have agreed to support the plan as well as the ongoing strong backing and support provided by our customers and lenders,” David Dunlap, president and CEO of Superior, said. “We also thank all of our employees for their ongoing hard work and commitment to our company and our customers and are grateful to our vendors and other valuable business partners for their continued support. The company looks forward to quickly emerging from the Chapter 11 cases in early 2021.”
Subject to the bankruptcy court’s approval, Superior intends to obtain a $120 million debtor-in-possession letter of credit facility for its subsidiary SESI, as borrower, with certain of the lenders under SESI’s existing credit facility.
Upon bankruptcy court approval, approximately $47.4 million of outstanding undrawn letters of credit under the existing facility will be deemed outstanding under the DIP facility. The DIP facility is expected to provide sufficient letter of credit capacity to support the company’s continuing business operations and minimize disruption during the Chapter 11 cases.
Ducera Partners and Johnson Rice & Company are acting as financial advisors for Superior and Latham & Watkins and Hunton Andrews Kurth are acting as legal counsel. Evercore is acting as financial advisor for an ad hoc group of noteholders, with Davis Polk & Wardwell and Porter Hedges serving as legal counsel. FTI Consulting is acting as financial advisor for the agent for the Superior’s secured asset-based revolving credit facility, with Simpson Thacher & Bartlett acting as legal counsel.