Nuverra Environmental Solutions entered into a restructuring support agreement with the holders of more than 80% of the company’s outstanding 12.50%/10.0% senior secured second lien notes due 2021 to complete a comprehensive recapitalization.
According to a related 8-K filing, on April 6, 2017, the company entered into a sixth amendment to its term loan credit agreement with Wilmington Savings Fund Society served as administrative agent and Wells Fargo served as collateral agent.
On April 10, 2017, the company entered into a seventh amendment to its term loan credit agreement with Wilmington as administrative agent and Wells Fargo, as collateral agent, which further amended the agreement by increasing the term loan lenders’ commitment, and the principal amount borrowed by the company, from $60.3 million to $65.8 million.
The recapitalization will be completed pursuant to a proposed prepackaged plan of reorganization through the filing of a Chapter 11 restructuring on or before Monday, April 24, 2017. The company expects to commence a solicitation of votes for the plan no later than April 20, 2017.
Significant elements of the plan as contemplated by the RSA and subject to the terms and conditions of the RSA include:
- Debtor-in-possession financing provided by the lenders under the company’s asset-based lending facility and/or term loan
- Payment in full of all administrative expense claims, priority tax claims, priority claims and asset-based lending facility claims
- Payment in full of all undisputed customer, vendor or other trade obligations
- Conversion of $75 million in term loan claims into newly issued common stock
- Conversion of 2021 notes into newly issued common stock and rights in the rights offering
- Cancellation of the company’s 9.875% senior notes due 2018 and existing common stock;
- A rights offering provided to the holders of the 2021 Notes, and, under certain conditions, the 2018 notes and existing common stock to acquire, in the aggregate, $150 million of new common stock of the reorganized Company
- Exit financing, to the extent necessary
- Company to emerge with significantly reduced debt
The company retained Robert D. Albergotti of AP Services and a managing director of AlixPartners as chief restructuring officer. Albergotti is responsible for the oversight and implementation of the company’s restructuring efforts and will report directly to the company’s board of directors. Albergotti has expertise in the development and implementation of complex restructuring solutions to maximize value for all stakeholders, including expertise managing restructurings in Chapter 11 cases.