EXCO Resources, Inc. Enters into Forbearance Agreements
December 21 2017 - 7:30AM
Business Wire
December 21, 2017 – EXCO Resources, Inc. (NYSE: XCO)
("EXCO" or the "Company") today announced that it has entered into
forbearance agreements (the “Forbearance Agreements”) with the
administrative agent and the majority of lenders under its
reserve-based credit agreement (the “Credit Agreement”), holders of
approximately 87% of the outstanding aggregate principal amount of
its senior secured 1.5 lien notes due March 2022 (the “1.5 Lien
Notes”) and lenders holding approximately 81% of its outstanding
senior secured 1.75 lien term loans due October 2020 (“1.75 Lien
Term Loans”) (collectively, the “Forbearing Creditors”).
Under the terms of the Forbearance Agreements, the Forbearing
Creditors have agreed to forbear from exercising any and all
remedies available to them under the Credit Agreement, the 1.5 Lien
Notes and the 1.75 Lien Term Loans as a result of the Company not
making the December 20, 2017 payment due under the 1.75 Lien Term
Loan, as well as certain defaults arising as a result of the
Company’s failure to meet affirmative covenants under its Credit
Agreement as of December 31, 2017, among other things. The
Forbearance Agreements will expire upon the earlier of 11:59 PM
(Eastern Time) on January 15, 2018 or the occurrence of certain
events specified in the Forbearance Agreements.
The Company also announced it has received a commitment for a
$250 million debtor-in-possession financing in the event that the
Company elects to pursue a filing of voluntary petitions under
Chapter 11 of the U.S. Bankruptcy Code.
Harold L. Hickey, EXCO’s Chief Executive Officer and President,
said, “We are continuing to explore strategic alternatives to
address our financial position and maximize the value of the
Company. The Forbearance Agreements provide EXCO with additional
time and flexibility as we continue our ongoing and constructive
discussions with our stakeholders regarding the Company’s capital
structure. We remain committed to acting in the best interest of
our stakeholders and will continue to take actions to strengthen
our financial position.”
As previously announced, EXCO's next quarterly interest payment
of approximately $27 million, based on the paid in-kind interest
rate of 15.0% on the 1.75 Lien Term Loans, was scheduled to occur
on December 20, 2017, and was required to be paid in-kind pursuant
to the terms of the indenture governing the 1.5 Lien Notes. The
Company did not make the interest payment on the 1.75 Lien Term
Loans on December 20, 2017.
The Company, together with the Audit Committee of the Board of
Directors, is continuing to explore strategic alternatives to
strengthen the Company's balance sheet and maximize the value of
the Company, which may include seeking a comprehensive out-of-court
restructuring or reorganization under Chapter 11 of the U.S.
Bankruptcy Code. As previously announced, the Company has retained
PJT Partners LP as financial advisor and Alvarez & Marsal North
America, LLC as restructuring advisor. The Company continues to
retain Kirkland & Ellis LLP as its legal advisor to assist the
Audit Committee and management team with the strategic review
process.
Additional information on the Forbearance Agreements is
contained in a report on Form 8-K, which has been filed with the
Securities and Exchange Commission.
About EXCO Resources, Inc.
EXCO Resources, Inc. is an oil and natural gas exploration,
exploitation, acquisition, development and production company
headquartered in Dallas, Texas with principal operations in Texas,
North Louisiana and the Appalachia region. EXCO’s headquarters are
located at 12377 Merit Drive, Suite 1700, Dallas, TX 75251.
Forward-Looking Statements
This release may contain forward-looking statements relating to
future financial results, business expectations and business
transactions. Actual results may differ materially from those
predicted as a result of factors over which EXCO has no control.
Such factors include, but are not limited to: discussions regarding
EXCO’s restructuring, EXCO’s liquidity, sources of capital
resources and ability to maintain compliance with debt covenants,
continued volatility in the oil and gas markets, the continued
listing of EXCO’s common shares on the NYSE, the estimates of
reserves, commodity price changes, regulatory changes and general
economic conditions. These risk factors are included in EXCO’s
reports on file with the SEC. Except as required by applicable law,
EXCO undertakes no obligation to publicly update or revise any
forward-looking statements.
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EXCO Resources, Inc.Tyler Farquharson, 214-368-2084Vice
President, Chief Financial Officer and
Treasurerwww.excoresources.com