One oilfield company with an office in Snyder has filed for bankruptcy and a judge has agreed to fast-track restructuring proceedings for another.
Key Energy Services, Inc., filed for bankruptcy earlier this week in Delaware.
The principal components of the plan support agreement include:
• Replacing Key’s existing $100 million asset-based revolving credit facility with a new ABL facility.
• Reducing Key’s term loan obligations to $250 million.
• Exchanging 100 percent of Key’s existing senior notes for 7.5 million shares of reorganized Key, plus rights to acquire additional shares of reorganized Key.
• Cancelling all of Key’s existing common stock in exchange for 815,891 shares of reorganized Key, plus rights and warrants to acquire additional shares of reorganized Key.
“The filing of our prepackaged bankruptcy cases with the bankruptcy court is an important milestone in the process of restructuring Key to significantly reduce the company’s debt burden and to position the company to take advantage of opportunities that emerge as the market recovers,” said Robert Drummond, Key’s president and chief executive officer. “Importantly, this prepackaged plan will not interrupt our day-to-day operations and will allow Key to continue to deliver a high level of service to our customers in a safe manner and to pay our employees and vendors on a timely basis.”
Also this week, a bankruptcy judge approved a fast track to bankruptcy path for Basic Energy Services that could allow the court of give final approval to a debt-cutting plan Dec. 9. Basic Energy filed for bankruptcy earlier this week.
The plan would provide $125 million in new money through a rights offering and the conversion of $800 million in existing bonds into equity.
The judge gave the company temporary approval to borrow as much as $90 million at 12 percent to keep operating while under court supervision.
Basic also received approval to keep paying its employees while it seeks approval for the plan.
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