Unit Corporation Restructuring Support Agreement
Written by alianca on 21 de outubro de 2021
Unit Corporation, a Tulsa-based energy company, has announced that it has entered into a Restructuring Support Agreement (RSA) with its lenders. This RSA outlines a plan for the company to restructure its debt and emerge from bankruptcy as a stronger and more financially stable entity.
The agreement between Unit Corporation and its lenders, which include funds affiliated with Apollo Global Management, LLC and other creditors, provides for a pre-packaged Chapter 11 bankruptcy filing. This means that the company has already gained approval from its creditors for the proposed restructuring plan, which is expected to significantly reduce Unit Corporation`s debt and interest expenses.
Under the proposed restructuring plan, Unit Corporation will receive $50 million in new capital to support its operations and finance its exit from Chapter 11 bankruptcy. Additionally, the company expects to significantly reduce its debt by exchanging its existing senior unsecured notes for new secured notes.
The proposed restructuring plan also includes a commitment from Unit Corporation to divest its oil and gas properties in the Hugoton Basin of Kansas and Oklahoma. The company intends to use the proceeds from the sale of these assets to reduce its debt further.
Unit Corporation has faced significant financial challenges in recent years, prompting the need for a restructuring plan. The company`s financial challenges have been largely due to declining oil and gas prices, as well as its substantial debt load.
Unit Corporation CEO David Merrill expressed optimism about the restructuring plan, stating that it “represents a significant milestone in our efforts to strengthen our balance sheet, enhance our liquidity position, and position ourselves for long-term success.”
The proposed restructuring plan is subject to approval by the United States Bankruptcy Court for the Southern District of Texas. Assuming court approval, Unit Corporation expects to complete its restructuring process in early 2021.
In conclusion, the Restructuring Support Agreement entered into by Unit Corporation is a significant step towards the company`s financial recovery. By reducing its debt and focusing on its core operations, the company aims to emerge from Chapter 11 bankruptcy as a stronger and more financially stable entity.
