Exco Resources Nears Deal to Stave Off Bankruptcy
March 15 2017 - 3:16PM
Dow Jones News
By Matt Jarzemsky
Exco Resources Inc. is nearing a deal to stave off a potential
bankruptcy that could ultimately put some of its creditors in
control of the company.
The Dallas-based company plans to sell $300 million in bonds to
a group of investors including Fairfax Financial Holdings Ltd.,
Bluescape Resources Co. and Oaktree Capital Group LLC and use the
proceeds to pay down its credit line and fund operations, according
to people familiar with the matter.
Providers of the new debt would also receive warrants giving
them the option to acquire up to about 55% of Exco at about 90
cents a share, the people said. Exco's stock closed Tuesday at 59
cents and recently traded at around 58 cents.
Exco, like other energy producers, has struggled to regain its
footing following a steep drop in oil and gas prices in late 2014.
More than 100 North American oil and gas producers have filed for
bankruptcy protection since the beginning of 2015, according to
Texas law firm Haynes and Boone LLP, and a number of others have
cut their debt via out-of-court deals with creditors.
Prices have rebounded, but not enough to restore many energy
producers to profitability. Natural gas hit a two-year high on Dec.
28 but has fallen 24% since then.
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com
(END) Dow Jones Newswires
March 15, 2017 15:01 ET (19:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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