EXCO Resources filed Chapter 11 in the U.S. Bankruptcy Court in the Southern District of Texas. JPMorgan Chase, Fairfax Financial Holdings, Bluescape Resources and Cove Key Management agreed to provide $250 million of DIP financing to support the company’s restructuring.
EXCO intends to restructure its balance sheet but will continue to operate in the ordinary course of business during the restructuring process.
The DIP funding, subject to court approval, is expected to refinance the company’s existing reserve-based credit agreement and support its day-to-day operations during the restructuring process. The company intends to pay vendors in full for all goods and services provided after the filing date.
EXCO will continue to engage in constructive discussions with its creditor constituencies regarding the terms of a financial restructuring plan.
Harold L. Hickey, EXCO’s president and CEO, said, “Like many other companies in our industry, EXCO’s financial position has been negatively impacted by the sustained downturn in commodity prices and uncertainty in the energy market. We believe that this financial restructuring process will enable us to strengthen our balance sheet as we continue to operate in the ordinary course of business.”
EXCO retained PJT Partners as financial advisor with Alvarez & Marsal as restructuring advisor. Kirkland & Ellis served as legal advisor.
EXCO Resources is an oil and natural gas exploration, exploitation, acquisition, development and production company headquartered in Dallas, with principal operations in Texas, North Louisiana and the Appalachia region.
