Seventy Seven Energy Inc. Enters into Second Amended and Restated Restructuring Support Agreement
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Consenting 2022 Noteholders Join Amended Agreement, Majority of
Noteholders Support Deal
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$1.1 Billion of Existing Debt to Be Converted into New Common Equity
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Trade Creditors, Suppliers and Contractors to Be Paid in Full in the
Ordinary Course
Seventy Seven Energy Inc. (the “Company”), today announced that it has
entered into a Second Amended and Restated Restructuring Support
Agreement (the “Second Amended and Restated Restructuring Support
Agreement”) with (i) certain lenders representing 100% of the
outstanding principal amount under the Company’s Incremental Term
Supplement (Tranche A) loan, (ii) certain lenders representing
approximately 86% of the outstanding principal amount of loans under the
Company’s $400 Million Term Loan Credit Agreement dated June 25, 2014,
(iii) certain noteholders (the “Consenting 2019 Noteholders”)
collectively owning or controlling approximately 63% of the aggregate
outstanding principal amount of the Company’s 6.625% senior unsecured
notes due 2019 and (iv) certain noteholders (the “Consenting 2022
Noteholders” and together with the Consenting 2019 Noteholders, the
“Noteholders”) collectively owning or controlling over 50% of the
aggregate principal amount of the 6.50% senior unsecured notes due 2022.
The Second Amended and Restated Restructuring Support Agreement, which
supersedes the previously announced Amended and Restated Restructuring
Support Agreement dated May 3, 2016, was amended to, among other items,
add the Consenting 2022 Noteholders as parties to the agreement, which
will require these parties to support the consensual Joint Prepackaged
Plan of Reorganization (the “Plan”) to be filed under Chapter 11 of the
United States Bankruptcy Code (“Chapter 11”). In exchange for their
support, the Consenting 2022 Noteholders, will, among other things, be
entitled to a appoint a board observer and consultation rights with
respect to the appointment of independent members of the reorganized
Company’s Board of Directors.
"The participation of all of our debtholders in this process is
a further endorsement by the stakeholders of Seventy Seven Energy in the
future of this company," Chief Executive Officer Jerry Winchester said.
“The exchange of debt for equity will provide us with a significantly
deleveraged balance sheet, and we will emerge from this process with the
ability to take advantage of our operational strengths and strong asset
base to grow our business as market conditions improve.”
As previously announced, a key component of the Plan is that all trade
creditors, suppliers and contractors will be paid in the ordinary course
of business. All of the Company’s commercial and operational contracts
will remain in effect in accordance with their terms preserving the
rights of all parties, and customer relationships will continue
uninterrupted. Employees can expect that operations will continue as
usual and they will be paid in the ordinary course. The Company intends
to commence a prepackaged Chapter 11 proceeding on or before June 9,
2016, in order to implement the Plan. The prepackaged Chapter 11 filing
will follow the solicitation process that began on May 9, 2016.
The Company has set up a toll-free information line to answer questions
about the restructuring. The information line can be accessed by calling
(844) 224-1136 (internationally +1 (917) 962-8386). The Company has also
posted FAQ’s on its website at 77NRG.com/Restructuring/.
This press release is not intended to be, and should not in any way be
construed as, a solicitation of votes of noteholders or other investors
regarding the plan of reorganization.
About Seventy Seven Energy Inc.
Headquartered in Oklahoma City, SSE provides a wide range of wellsite
services and equipment to U.S. land-based exploration and production
customers. SSE’s services include drilling, hydraulic fracturing and
oilfield rentals and its operations are geographically diversified
across many of the most active oil and natural gas plays in the onshore
U.S., including the Anadarko and Permian basins and the Eagle Ford,
Haynesville, Marcellus, Niobrara and Utica shales. For additional
information about SSE, please visit our website at www.77nrg.com,
where we routinely post announcements, updates, events, investor
information and presentations and recent news releases.
This news release contains certain statements and
information that may constitute “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts that address
activities, events or developments that we expect, believe or anticipate
will or may occur in the future are forward-looking statements. The
words “believe,” “ensure”, “will” and similar expressions, and the
negative thereof, are intended to identify forward-looking statements.
Without limiting the generality of the foregoing, forward-looking
statements contained in this press release specifically include
statements, estimates and projections regarding our business outlook and
plans, including with respect to our capital structure, corporate
valuation, future financial position and capital resources, operations,
performance and growth. Forward-looking statements are not assurances of
future performance. These forward-looking statements are based on
management’s current expectations and beliefs, forecasts for our
existing operations, experience, and perception of historical trends,
current conditions, anticipated future developments and their effect on
us, and other factors believed to be appropriate. Although management
believes that the expectations and assumptions reflected in these
forward-looking statements are reasonable as and when made, no assurance
can be given that these assumptions are accurate or that any of these
expectations will be achieved (in full or at all). Moreover, our
forward-looking statements are subject to significant risks and
uncertainties, many of which are beyond our control, which may cause
actual results to differ materially from our historical experience and
our present expectations or projections which are implied or expressed
by the forward-looking statements. Important factors that could cause
actual results to differ materially from those in the forward-looking
statements include, but are not limited to, risks relating to economic
conditions; volatility of crude oil and natural gas commodity prices;
delays in or failure of delivery of current or future orders of
specialized equipment; the loss of or interruption in operations of one
or more key suppliers or customers; oil and gas market conditions; the
effects of government regulation, permitting and other legal
requirements, including new legislation or regulation of hydraulic
fracturing; operating risks; the adequacy of our capital resources and
liquidity; weather; litigation; competition in the oil and natural gas
industry; and costs and availability of resources.
For additional information regarding known material factors that could
cause our actual results to differ from our present expectations and
projected results, please see our filings with the U.S. Securities and
Exchange Commission (“SEC”), including our Current Reports on Form 8-K
that we file from time to time, Quarterly Reports on Form 10-Q, and our
Annual Reports on Form 10-K.
Readers are cautioned not to place undue reliance on any forward-looking
statement which speaks only as of the date on which such statement is
made. We undertake no obligation to correct, revise or update any
forward-looking statement after the date such statement is made, whether
as a result of new information, future events or otherwise, except as
required by applicable law.
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