Emerge Energy Services LP Enters into Restructuring Support Agreement
April 22 2019 - 4:47PM
Fort Worth, Texas
- April 22, 2019 - Emerge Energy Services LP (NYSE: EMES) (the
"Partnership") today announced that it has entered into a
restructuring support agreement (the "RSA") with its operating
subsidiary Superior Silica Sands LLC ("SSS") and the Partnership's
other subsidiaries (together with the Partnership and SSS, "Emerge
Energy"), its general partner ("Emerge GP"), certain direct and
indirect equity holders of Emerge GP, the lenders under Emerge
Energy's revolving credit facility, and the noteholders under
Emerge Energy's second lien note purchase agreement (the
noteholders, together with the lenders under the revolving credit
facility, the "Consenting Creditors").
As set forth in the RSA, the
parties thereto have agreed to the principal terms of a proposed
financial restructuring of Emerge Energy (the "Transaction"), which
will be implemented through an out-of-court restructuring or, in
the event that the special restructuring committee of the board of
directors of Emerge GP (the "Committee") determines in good faith
that the out-of-court restructuring is no longer reasonably
possible or in the best interests of Emerge Energy and its
stakeholders, an in-court reorganization implemented in one or more
cases filed under Title 11 of the United States Code.
Under the out-of-court
restructuring, Emerge Energy's obligations under the revolving
credit agreement will be paid in full. Noteholders under the
note purchase agreement will receive new second lien secured notes
and pro rata ownership interests in new common units representing a
95% limited partner interest in the Partnership. Existing
common unitholders of the Partnership will receive new common
units.
If it is determined that the
out-of-court restructuring is no longer reasonably possible or in
the best interests of Emerge Energy and its stakeholders, Emerge
Energy will commence the in-court reorganization. Emerge Energy's
obligations under the revolving credit agreement will be paid in
full and noteholders under the note purchase agreement will receive
new second lien secured notes and pro rata ownership interests in
new common units representing 100% limited partner interest in the
Partnership; provided that, if and only if the class of holders of
general unsecured claims vote to accept the chapter 11 plan, then
the Noteholders have agreed to carve-out from their collateral and
receipt of 100% of such limited partner interests, a settlement
fund to be shared collectively by such holders and the existing
equity holders in the Partnership consisting of (i) 5% of the new
common units in the Partnership, subject to certain dilution; and
(ii) out-of-the-money warrants for 15% of the new common units in
the Partnership, subject to certain types of dilution.
However, in the event that the class of holders of general
unsecured claims vote to reject the chapter 11 plan, then such
holders and the existing equity holders in the Partnership shall
not receive any distributions or property under the chapter 11
plan.
The RSA will terminate if the
Transaction is not consummated in accordance with the RSA by
December 31, 2019 (unless extended in writing by the parties) or if
the parties otherwise agree in writing. A party may also terminate
the RSA upon a material breach by another party of its obligations
under the RSA.
Each holder of common units of the
Partnership is urged to consult its own tax advisor with respect to
the tax consequences of the Transaction based on its own particular
circumstances.
A summary of the material terms
and conditions of the RSA and a copy of the agreement will be
included in the Partnership's Current Report on Form 8-K being
filed with the Securities and Exchange Commission today.
Advisors
Latham & Watkins LLP is acting
as legal counsel, Houlihan Lokey is acting as investment banking
debt restructuring advisor and Ankura Consulting Group, LLC is
acting as financial advisor to Emerge Energy in connection with the
restructuring.
Weil, Gosthal & Manges LLP is
acting as legal counsel to the Consenting Creditors.
About Emerge Energy Services LP
Emerge Energy Services LP is a
growth-oriented limited partnership engaged in the business of
mining, producing, and distributing silica sand, a key input for
the hydraulic fracturing of oil and natural gas wells, through its
subsidiary Superior Silica Sands LLC.
Forward-Looking Statements
This release contains certain
statements that are "forward-looking statements." These statements
can be identified by the use of forward-looking terminology
including "may," "believe," "will," "expect," "anticipate," or
"estimate." These forward-looking statements involve risks and
uncertainties, and there can be no assurance that actual results
will not differ materially from those expected by management of
Emerge Energy. When considering these forward-looking statements,
you should keep in mind the risk factors and other cautionary
statements in Emerge Energy's periodic reports filed with the SEC.
The risk factors and other factors noted in such periodic reports
could cause actual results to differ materially from those
contained in any forward-looking statement. Except as required by
law, Emerge Energy does not undertake any obligation to update or
revise such forward-looking statements to reflect events or
circumstances that occur after the date hereof.
PRESS CONTACT
Investor Relations
(817) 618-4020
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Emerge Energy Services LP via Globenewswire
EMERGE ENERGY SERVICES LP (NYSE:EMES)
Historical Stock Chart
From Jun 2024 to Jul 2024
EMERGE ENERGY SERVICES LP (NYSE:EMES)
Historical Stock Chart
From Jul 2023 to Jul 2024