Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Breitburn Energy Partners LP (1357371) 10-Q published on Nov 13, 2017 at 5:23 pm
Reporting Period: Sep 29, 2017
The obligations under the Exit Facility will be secured by valid and perfected first priority security interests in and liens on substantially all of LegacyCo’s assets. The term loan facility will bear interest based on the Base Rate or LIBOR, plus 1.00% for Base Rate loans and 2.00% for LIBOR loans, and mature on the 7-year anniversary of the Plan Effective Date. The revolving credit facility will bear interest at the Base Rate or LIBOR, plus the applicable interest margin, and mature on the 4-year anniversary of the Plan Effective Date. The revolving credit facility includes a letter of credit facility available for the issuance of letters of credit in an aggregate principal amount not to exceed a sublimit of $100 million and a swingline facility in an aggregate principal amount not to exceed a sublimit of $50 million. The borrowing base will be redetermined semi-annually, beginning on October 1, 2018. The Exit Facility will be subject to various conditions and covenants.
On October 11, 2017, the Debtors entered into an amended and restated backstop commitment agreement (“BCA”) with the Consenting Second Lien Creditors and certain holders of the Senior Unsecured Notes (the “Commitment Parties”), which Commitment Parties are also the Consenting Senior Unsecured Creditors under the RSA. The BCA is subject to Bankruptcy Court approval. In accordance with the Plan and pursuant to the BCA, the Commitment Parties will be issued, and the Commitment Parties have agreed to exercise, severally and not jointly, Minimum Allocation Rights to purchase 40% of the New Permian Corp. Shares for an aggregate purchase price of $310 million in cash. In addition, as described above, holders of the Senior Unsecured Notes that are “eligible offerees” (including the Commitment Parties) will be issued subscription rights in the Rights Offering to purchase on a pro rata basis up to 60% of New Permian Corp. Shares for an aggregate purchase price of $465 million in cash. Under the BCA, the Debtors have been granted an option (“Put Option”) to require the Commitment Parties to purchase, severally and not jointly, on the Plan Effective Date, any New Permian Corp. Shares that are not duly subscribed to pursuant to the Rights Offering. In consideration for the Put Option, the Backstop Commitment (as defined in the BCA) and the other agreements of the Commitment Parties in the BCA, including the obligation of each of the Commitment Parties to exercise the Minimum Allocation Rights, on the Plan Effective Date, the Commitment Parties shall be paid a nonrefundable premium (“Put Option Premium”) in an amount equal to 10% of the aggregate outstanding number of New Permian Corp. Shares issued on the Plan Effective Date, which will dilute the New Permian Corp. Shares issued pursuant to the Minimum Allocation Rights and the Rights Offering.
The Commitment Parties’ commitments to exercise their Minimum Allocation Rights and to backstop the Rights Offering, and the other transactions contemplated by the BCA, are conditioned upon the satisfaction of all conditions to the effectiveness of the Plan, and other applicable conditions precedent set forth in the BCA, including Bankruptcy Court approval of the BCA. The BCA may be terminated upon the occurrence of certain events, including the failure to meet specified milestones relating to the filing, confirmation and consummation of the Plan, among other requirements, and in the event of certain breaches by the parties under the BCA. The Debtors will also be required to pay a termination premium in the amount of $38.8 million in cash if the BCA is terminated for certain events, subject however, to the prior payment in full in cash of the claims of the holders of Senior Secured Notes.
In addition, as previously discussed in Note 2, the Plan is premised on the division of the Debtors’ assets and existing businesses into two separate entities upon the occurrence of the Plan Effective Date: LegacyCo, which will own all of the Debtors’ assets other than the Permian Assets; and New Permian Corp., which will own all of the Permian Assets. In September 2017, in connection with the preparation of the Plan, the Partnership determined that the fair value of the Permian Assets should be based on the market approach, which approximates the proceeds to be received from the contemplated Rights Offering and exercise of Minimum Allocation Rights described in the Plan. See “Chapter 11 Cases—Joint Chapter 11 Plan of Reorganization” in Note 2 above. For the three months and nine months ended September 30, 2017, non-cash impairment charges totaled $157.8 million for the Permian Assets.
In addition, as previously discussed above, the Plan is premised on the division of the Debtors’ assets and existing businesses into two separate entities upon the occurrence of the Plan Effective Date: LegacyCo, which will own all of the Debtors’ assets other than the Permian Assets; and New Permian Corp., which will own all of the Permian Assets. In September 2017, in connection with the preparation of the Plan, the Partnership determined that the fair value of the Permian Assets should be based on the market approach, which approximates the proceeds to be received from the contemplated Rights Offering and exercise of Minimum Allocation Rights described in the Plan. See “Chapter 11 Cases—Joint Chapter 11 Plan of Reorganization” above. For the three months and nine months ended September 30, 2017, non-cash impairment charges totaled $157.8 million for the Permian Assets.