Memorial Production Partners LP Announces Plan Support Agreement and Agreement-in-Principle on Comprehensive Financial Restru...
23 Diciembre 2016 - 5:00AM
Financial Restructuring Expected to Eliminate
More than $1.3 Billion of Debt
Memorial Production Partners LP (NASDAQ:MEMP) (“MEMP” or “the
Partnership”) today announced that it has entered into a Plan
Support Agreement (“PSA”) with holders of 50.2% of the
Partnership’s 7.625% senior notes due 2021 and the Partnership’s
6.875% senior notes due 2022 (collectively, the “Notes”), and has
reached an agreement-in-principle with the agent under its
revolving credit facility (subject to documentation and approval by
the lenders under the revolving credit facility) on the terms of a
financial restructuring plan that is expected to eliminate more
than $1.3 billion of debt from the Partnership’s balance sheet. The
Partnership is working closely with the lenders under its revolving
credit facility to reach a definitive agreement.
Under the terms of the PSA, the financial restructuring will,
among other things:
- Cancel more than $1.1 billion of principal in outstanding
Notes. In the restructuring, the noteholders will receive 98% of
the common equity interests of the restructured company as of the
effective date of the restructuring plan (the “Effective Date”).
The noteholders, at their election, will be entitled to receive an
additional cash payment of up to approximately $24.6 million.
- Provide the Partnership’s limited partners with a recovery in
the form of (i) 2% of reorganized MEMP’s equity on the Effective
Date and (ii) 5-year warrants to acquire an additional 8% of the
total outstanding equity in reorganized MEMP at an exercise price
based upon the outstanding principal amount plus interest accrued
on the Notes.
- Be structured in a manner intended to minimize, to the extent
possible, the negative tax impact of cancellation of debt income to
the Partnership’s existing limited partners. The Partnership
expects to emerge from a financial restructuring plan as a
corporation for U.S. federal income tax purposes.
- Ensure that ordinary course trade obligations will be paid in
full.
In anticipation of the financial restructuring
and to reduce exposure under the revolving credit facility, the
Partnership has monetized certain of its hedge positions and used
the net cash proceeds to repay outstanding borrowings under its
revolving credit facility by approximately $190 million. This has
resulted in an equivalent reduction in the borrowing base under the
revolving credit facility.
William J. Scarff, President and Chief Executive
Officer of the general partner of MEMP, said, “Today’s announcement
highlights the next step in our efforts to reduce debt and position
the Partnership for the long-term. After thoroughly considering all
options with the assistance of our legal and financial advisors,
and in light of the challenging commodity pricing environment and
the recent reduction of our borrowing base, we believe that this
course of action is in the best interests of MEMP. With the support
of our lenders and noteholders, we expect to complete the financial
restructuring on an expedited basis and emerge as a stronger
company.”
Mr. Scarff continued, “Moving forward, we are
focused on maintaining production across our high-quality asset
base and executing on our strategic priorities. Our employees are
the backbone of our success and it is because of their hard work
and commitment to working safely that we continue to achieve solid
operational results. We thank them for their continued
dedication.”
To implement the terms of the PSA and
agreement-in-principle and complete the proposed deleveraging
transaction, MEMP expects to voluntarily file for reorganization
under Chapter 11 of the United States Bankruptcy Code in the coming
weeks.
MEMP’s operations and production are expected to
continue as normal throughout the court-supervised financial
restructuring process. The Partnership intends to continue meeting
its employee, customer and vendor obligations in the normal course
and will continue to adhere to all applicable regulatory and
environmental standards.
MEMP expects to file a Current Report on Form
8-K with the Securities and Exchange Commission that will include
the full terms of the PSA.
Perella Weinberg Partners L.P. is serving as
financial advisor to MEMP and Weil, Gotshal & Manges LLP is
serving as its legal counsel.
Miller Buckfire & Co., LLC is serving as
financial advisor and Davis Polk & Wardwell LLP is serving
as legal counsel to the ad hoc group of holders of Notes that
entered into the PSA.
About Memorial Production Partners LP
Memorial Production Partners LP is a publicly traded partnership
engaged in the acquisition, production and development of oil and
natural gas properties in the United States. MEMP's properties
consist of mature, legacy oil and natural gas fields. MEMP is
headquartered in Houston, Texas. For more information, visit
www.memorialpp.com.
Forward-Looking Statements
This press release includes “forward-looking
statements.” All statements, other than statements of historical
facts, included in this press release that address activities,
events or developments that MEMP expects, believes or anticipates
will or may occur in the future are forward-looking statements.
Terminology such as “will,” “would,” “should,” “could,” “expect,”
“anticipate,” “plan,” “project,” “intend,” “estimate,” “believe,”
“target,” “continue,” “potential,” the negative of such terms or
other comparable terminology are intended to identify
forward-looking statements. These statements include, but are not
limited to, statements about financial restructuring or strategic
alternatives and MEMP’s expectations of plans, goals, strategies
(including measures to implement strategies), objectives and
anticipated results with respect thereto. These statements are
based on certain assumptions made by MEMP based on its experience
and perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in the circumstances, but such assumptions may prove to be
inaccurate. Such statements are also subject to a number of risks
and uncertainties, many of which are beyond the control of MEMP,
which may cause MEMP’s actual results to differ materially from
those implied or expressed by the forward-looking statements. These
include risks and uncertainties relating to, among other things,
the ability to confirm and consummate the restructuring plan in
accordance with the terms of the PSA, including on the time frame
contemplated therein; the bankruptcy process, including the effects
thereof on MEMP’s business and on the interests of various
constituents, the length of time that MEMP may be required to
operate in bankruptcy and the continued availability of operating
capital during the pendency of such proceedings; third party
motions in any bankruptcy case, which may interfere with the
ability to confirm and consummate a plan of reorganization; the
potential adverse effects of bankruptcy proceedings on the
Partnership’s liquidity or results of operations; increased costs
to execute the financial restructuring; MEMP’s efforts to reduce
leverage; MEMP’s level of indebtedness including its ability to
satisfy its debt obligation; risks related to MEMP’s ability to
generate sufficient cash flow, to make payments on its obligations
and to execute its business plan or the PSA; MEMP’s ability to
access funds on acceptable terms, if at all, because of the terms
and conditions governing MEMP’s indebtedness or otherwise; and
changes in commodity prices and hedge positions and the risk that
MEMP’s hedging strategy may be ineffective or may reduce its
income. Please read MEMP’s filing with the Securities and Exchange
Commission (“SEC”), including “Risk Factors” in MEMP’s Annual
Report on Form 10-K, and if applicable, MEMP’s Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, which are available on
MEMP’s Investor Relations website at
http://investor.memorialpp.com/sec.cfm or on the SEC’s website at
http://www.sec.gov, for a discussion of risk and uncertainties that
could cause actual results to differ from those in such
forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. All forward-looking statements
in this press release are qualified in their entirety by these
cautionary statements. Except as required by law, MEMP undertakes
no obligation and does not intend to update or revise any
forward-looking statements, whether as a result of new information,
future results or otherwise.
Contacts
Investors:
Memorial Production Partners LP
Bobby Stillwell – Chief Financial Officer
(713) 588-8347
ir@memorialpp.com
Memorial Production Partners LP
Martyn Willsher – Treasurer
(713) 588-8346
ir@memorialpp.com
Media:
Meaghan Repko / Andrew Siegel / Aaron Palash
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
Memorial Production Partners Lp (MM) (NASDAQ:MEMP)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Memorial Production Partners Lp (MM) (NASDAQ:MEMP)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024