FORT WORTH, Texas, Oct. 25, 2016 /PRNewswire/ -- Basic Energy
Services, Inc. (NYSE: BAS) ("Basic" or the "Company") and certain
subsidiaries today announced that they had filed voluntary
petitions under Chapter 11 of the United States Bankruptcy Code in
the Bankruptcy Court for the District of Delaware to pursue a prepackaged plan
("Prepackaged Plan") of reorganization in accordance with its
previously announced restructuring support agreement with creditors
to effectuate a comprehensive balance sheet restructuring (the
"RSA").
The RSA and Prepackaged Plan provides for a substantial
deleveraging transaction pursuant to which Basic will meaningfully
improve its balance sheet by equitizing over $800 million of its existing unsecured bond
obligations and will substantially bolster its liquidity position
through a $125 million rights
offering for mandatorily convertible debt, to be backstopped by
certain unsecured noteholders. Basic's prepetition secured
term loan lenders and certain of its unsecured bondholders have
also agreed, subject to the Court's approval, to provide a
$90 million debtor-in-possession
credit facility (the "DIP Financing") to help fund the costs of the
restructuring.
Basic's creditors throughout its capital structure
overwhelmingly support the restructuring. Pursuant to the
RSA, 100% of Basic's prepetition secured term loan lenders and
holders of over 80% of its 7.75% senior notes due 2019 and 7.75%
senior notes due 2022 have agreed to vote in favor of the
Prepackaged Plan.
The Company began the solicitation of votes on the Prepackaged
Plan prior to filing its petition and currently estimates that it
will emerge from the Chapter 11 reorganization before the end of
2016.
Basic will continue to operate the business as
debtors-in-possession under the jurisdiction of the Bankruptcy
Court and fully expects to continue existing operations and
maintain staffing and equipment as normal throughout the
court-supervised financial restructuring process. Basic has
filed a series of motions with the Bankruptcy Court requesting
authority to continue normal operations, including requesting
Bankruptcy Court authority to continue paying employee wages and
salaries and providing employee benefits without
interruption. The Company continues to work closely
with its suppliers and partners to ensure it meets ongoing
obligations and business continues uninterrupted.
Roe Patterson, Basic's President and Chief Executive Officer
commented, "After much thought, we decided that Chapter 11
proceedings were necessary to create financial stability which will
allow Basic to be a formidable competitor during the cyclical
nature of our industry.
"Throughout the Chapter 11 process, we anticipate meeting
ongoing obligations to our employees, customers, vendors and
suppliers, and others. We will continue to provide our
customers with the dependable, high-quality services which Basic is
known for."
To support and effect the restructuring, Basic has retained
Weil, Gotshal & Manges LLP as legal counsel and Moelis &
Company as financial advisor.
Additionally, the Company engaged David
Johnston of AP Services, LLC (and a Managing Director at
AlixPartners LLP) as Chief Restructuring Officer. Mr.
Johnston is supported by a team including Charles Braley and Brian
Huffman as Senior Vice President and Vice President of
Restructuring, respectively.
As noted above, the RSA anticipates that the restructuring would
be implemented through the Prepackaged Plan, which remains subject
to Bankruptcy Court approval and the satisfaction of conditions
laid out in the Prepackaged Plan.
Additional information regarding Basic's restructuring is
available at www.basicenergyservices.com/restructuring. Basic has
also established a telephone hotline and e-mail address to respond
to inquiries from interested parties regarding the
restructuring. The telephone hotline is 844-801-5971. The
e-mail address is restructuring@basicenergyservices.com.
About Basic Energy Services
Basic Energy Services provides well site services essential to
maintaining production from the oil and gas wells within its
operating area. The Company employs over 3,500 employees in
more than 100 service points throughout the major oil and gas
producing regions in Texas,
Louisiana, Oklahoma, New
Mexico, Arkansas,
Kansas, California and the Rocky Mountain and
Appalachian regions. Additional information on Basic Energy
Services is available on the Company's website at
www.basicenergyservices.com.
Safe Harbor Statement
This release includes forward-looking statements and
projections, made in reliance on the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including
statements regarding the status of the negotiations and our
liquidity. Basic has made every reasonable effort to ensure
that the information and assumptions on which these statements and
projections are based are current, reasonable, and complete.
However, a variety of factors could cause actual results to differ
materially from the projections, anticipated results or other
expectations expressed in this release, including (i) changes in
demand for our services and any related material impact on our
pricing and utilizations rates, (ii) Basic's ability to execute,
manage and integrate acquisitions successfully, (iii) changes in
our expenses, including labor or fuel costs and financing costs,
(iv) continued volatility of oil or natural gas prices, and any
related changes in expenditures by our customers, (v) competition
within our industry, (vi) Basic's ability to comply with its
financial and other covenants and metrics in its debt agreements,
as well as any cross-default provisions, (vii) Basic's ability to
obtain approval by the Bankruptcy Court of the Prepackaged Plan or
any other plan of reorganization, including the treatment of the
claims of the Basic's lenders and trade creditors, among others;
(viii) Basic's ability to obtain approval with respect to motions
in the Chapter 11 cases and the Bankruptcy Court's rulings in the
Chapter 11 cases and the outcome of the Chapter 11 cases in
general; (ix) the length of time the Debtors will operate under the
Chapter 11 cases; (x) risks associated with third-party motions in
the Chapter 11 cases, which may interfere with the Debtors' ability
to develop and consummate the Prepackaged Plan or other plan of
reorganization; (xi) the potential adverse effects of the Chapter
11 cases on the Debtors' liquidity, results of operations or
business prospects; (xii) the ability to execute Basic's business
and restructuring plan; and (xiii) increased legal and advisor
costs related to the Chapter 11 cases and other litigation and the
inherent risks involved in a bankruptcy process. Additional
important risk factors that could cause actual results to differ
materially from expectations are disclosed in Item 1A of Basic's
Form 10-K for the year ended December 31,
2015 and subsequent Form 10-Qs filed with the SEC.
While Basic makes these statements and projections in good faith,
neither Basic nor its management can guarantee that anticipated
future results will be achieved. Basic assumes no obligation
to publicly update or revise any forward-looking statements made
herein or any other forward-looking statements made by Basic,
whether as a result of new information, future events, or
otherwise.
Contacts:
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Alan Krenek, Chief
Financial Officer
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Basic Energy
Services, Inc.
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817-334-4100
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Jack
Lascar
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Dennard-Lascar
Associates
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713-529-6600
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SOURCE Basic Energy Services, Inc.