Foresight Energy and all of its subsidiaries entered into a restructuring support agreement with ad hoc lender groups holding more than 73% of the approximately $1.4 billion in claims under each of Foresight Energy’s first lien credit agreement and second lien notes.
To implement the agreement, Foresight Energy filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Eastern District of Missouri on March 10.
Voluntary petitions also have been filed for all of Foresight Energy’s subsidiaries, including those operating the Williamson, Sugar Camp, Hillsboro operations, and the Sitran River Terminal.
Foresight Energyu intends to finance its operations throughout Chapter 11 with cash on hand and access to a $100 million new money debtor-in-possession financing facility, subject to bankruptcy court approval. Lenders party to the restructuring support agreement have committed to provide the full amount of the DIP facility. The proceeds of the DIP facility will be used to support ordinary course operations and payments to employees and suppliers throughout the restructuring process.
The restructuring support agreement contemplates that substantially all of Foresight Energy’s prepetition funded debt will be equitized. In turn, the restructuring support agreement authorizes providing a reorganized Foresight Energy with a $225 million exit financing facility backstopped by the lenders party to the restructuring support agreement. The exit facility is anticipated to provide a reorganized Foresight Energy with funds sufficient to repay the DIP facility and retain cash on hand to perform in the ordinary course of business upon emergence from its Chapter 11 Cases. The restructuring support agreement further contemplates that Robert D. Moore will continue to be chairman of the board of a reorganized Foresight Energy. Foresight Energy agreed to comply with certain milestones related to implementing its Chapter 11 plan and related restructuring process under the DIP facility and restructuring support agreement .
“We appreciate the support of our lenders, many of whom have been invested with the Partnership for a long time,” Moore said. “As we enter this process, I am confident the DIP Facility provides the Partnership with adequate liquidity to get payments to our valued trade partners and continue operating in the normal course of business without any anticipated impact to production levels.”
Foresight Energy filed first day motions with the Bankruptcy Court that, if granted, will enable day-to-day operations to continue uninterrupted.
Paul, Weiss, Rifkind, Wharton & Garrison is acting as legal counsel to Foresight Energy, Jefferies Group is acting as investment banker and FTI Consulting is acting as financial advisor. Akin Gump Strauss Hauer & Feld is acting as legal counsel and Lazard Frères & Co is acting as investment banker to the lender group, representing lenders under the first lien credit agreement. Milbank is acting as legal counsel and Perella Weinberg Partners is acting as investment banker to the lender group, representing crossover lenders under each of the second lien indenture and first lien credit agreement.
