C&J Energy Services has entered into a restructuring support agreement (RSA) with certain of its secured lenders representing greater than 50% of the outstanding principal amount under the company’s secured credit facility.

The terms of the RSA provide for the implementation of a restructuring that contemplates, among other things, a debt-to-equity conversion of the entire secured credit facility and an equity rights offering, which will be effectuated through a Chapter 11 plan of reorganization. The restructuring will enable the company to substantially deleverage its balance sheet – eliminating approximately $1.4 billion of existing debt – while continuing daily operations in the normal course.

Notably, the RSA provides for debtor-in-possession (DIP) financing in the form of a $100 million senior secured delayed-draw term loan facility being provided by certain lenders who are parties to the RSA. The company will also raise $200 million of additional capital through a backstopped rights offering. In addition, after emergence from the restructuring, the company intends to raise at least $100 million in exit financing through an ABL credit facility.

Cortland Capital Market Services serves as administrative agent under the secured credit facility, and the steering committee of lenders, are being advised by Davis Polk & Wardwell, FTI Consulting and Moelis & Company.

Loeb & Loeb, Kirkland & Ellis and Fried, Frank, Harris, Shriver & Jacobson are serving as legal counsel to the company. Evercore ISI serves as the company’s financial advisor and AlixPartners serves as the company’s restructuring advisor.

C&J Energy Services is a provider of well construction, well completions, well support and other complementary oilfield services to oil and gas exploration and production companies.