Swift Expects to Emerge from Bankruptcy by April 15, 2016
Swift Energy Company (“Swift” or the “Company”) announced today that the
United States Bankruptcy Court for the District of Delaware confirmed
its Plan of Reorganization (the “Plan”), paving the way for the Company
to emerge from bankruptcy.
The Company filed for Chapter 11 protection after entering into a
restructuring support agreement (RSA) with an ad hoc group of its senior
noteholders. Pursuant to the RSA, which contained milestones that
governed the timing and progress of the process, the parties agreed to
the Plan, which provided for a conversion of the Company’s senior
unsecured notes to equity, payment or satisfaction in full of most of
the Company’s secured and unsecured creditors, and distribution of
equity and warrants in Reorganized Swift to the existing shareholders.
At the time the Plan was filed, agreements had not been reached on the
treatment of the $75 million debtor in possession loan provided by
certain unsecured noteholders and the treatment of the Company’s
reserve-based loan. Agreements have since been reached with respect to
both loans. The Swift DIP lenders agreed to convert the entirety of
their $75 million DIP loan to equity and the Company’s bank group has
agreed to provide a $320 million reserve-based exit loan that will
refinance the existing loan and be used, among other things, to fund
obligations under the Plan and the Company’s operations following its
emergence from bankruptcy.
Upon implementation of the Plan, the pre-petition senior note holders,
contract rejection claim holders and DIP participants will hold 96% of
the New Swift Common Stock. Existing shareholders will hold 4% of the
New Swift Common Stock and receive Warrants for an additional 30% of the
New Swift Common Stock. As a result of the exchange of senior notes for
equity, the Company will have reduced its unsecured debt by
approximately $905 million. Pursuant to the terms of the Plan and orders
entered during the bankruptcy case, all pre-petition amounts owing to
royalty and working interest holders, vendors and suppliers will also
have been repaid.
Swift anticipates that the Plan will become effective and it will emerge
from bankruptcy on or before April 15, 2016. The effectiveness of the
Plan is contingent on the Company’s satisfaction of a number of
conditions that are set forth in the Plan and the Confirmation Order.
“Swift Energy has worked diligently to improve its business and meet the
required milestones under the RSA with the goal of achieving the best
possible outcome for all of our constituents. We are grateful for the
efforts of our employees and our strong relationships with royalty
owners, vendors, suppliers and capital providers, equity holders and
other stakeholders, all of whom have supported us during this
restructuring. Throughout this process, we have endeavored to work
cooperatively with our constituents to position Swift to emerge from
bankruptcy as a stronger company,” said Terry Swift, President and Chief
Executive Officer.
Swift Energy is being advised by the law firm of Jones Day, investment
bank Lazard, and financial advisor Alvarez & Marsal.
About Swift Energy Company
Swift Energy Company, founded in 1979 and headquartered in Houston,
engages in developing, exploring, acquiring and operating oil and gas
properties, with a focus on the Eagle Ford trend of South Texas and, to
a lesser extent, the onshore and inland waters of Louisiana.
Forward-Looking Statements
This press release includes “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. The
opinions, forecasts, projections, or other statements contained herein
or implied by this press release, other than statements of historical
fact, are forward-looking statements. These forward-looking statements
relate, in part, to the outcome of the Company’s negotiations with its
bondholders, the risks relating to the possible restructuring of the
Company’s balance sheet and enhancing of its liquidity, including
whether or not the Company will be successful in doing so, and the
sufficiency of the Company’s current liquidity sources to fund its
current operations. These statements are based upon assumptions that are
subject to change and to risks in the Company’s business. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Certain risks and
uncertainties inherent in the Company’s business are set forth in the
filings of the Company with the Securities and Exchange Commission.
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