SunEdison bankruptcy loan hearing moved to Friday

SunEdison’s scheduled hearing on Thursday in a New York bankruptcy court on its $300m bankruptcy loan was postponed until Friday.

Some of SunEdison’s creditors and its so-called yieldcos, TerraForm Global Inc. and TerraForm Power Inc., had objected in court papers to the debtor-in-possession loan, which includes features that may help a group of lenders recoup their initial investment.

According to SunEdison’s attorney Jay Goffman, a deal on the DIP loan was expected by Friday.

SunEdison filed for bankruptcy in April after its ambitious growth plan proved unsustainable. It received approval from a judge last month to tap some of the DIP loan.

Source: Reuters

Pacific Exploration backs restructuring bid by Catalyst over EIG

U.S.-based oil explorer Pacific Exploration & Production Corp stated that its board was in favor of a restructuring proposal submitted by Catalyst Capital Group over a bid by EIG Global Energy Partners.

Previously, EIG Global had submitted a proposal in early May 2016 to provide $250m debtor-in-possession (DIP) financing to Pacific Exploration and sponsor the company’s restructuring.

Catalyst Capital had also agreed to provide $250m in DIP financing in April 2019 to take a 29.3 percent stake in the restructured company.

Source: Reuters

 

Penn West warns it may default on debt; stock tumbles

Canada-based oil and gas producer Penn West Petroleum Ltd. warned it could be in violation of its lending agreements by the end of June 2016, leading to its shares losing a quarter of its value in Monday’s trade.

The company said that it had hired investment banking firm Rothschild of New York and accounting firm PWC of Calgary as advisers as it negotiated with its lending syndicate to ease conditions that could result in default if not met by 30 June 2016.

A default would allow the lenders to demand immediate repayment.

Penn West stock fell as low as $0.78 per share on Monday morning, down 26 per cent from its close of $1.05 on Friday. A year ago, Penn West stock was trading over $3 a share.

With debt of $1.87bn as of 31 March 2016, the company is required to maintain covenants on its senior debt and total debt to adjusted earnings. But depressed oil prices have led to a steep fall in earnings as compared to its debt.

Source:  The Star

 

VLM Airlines files for 6 month creditor protection

Belgium-based VLM Airlines filed for bankruptcy protection in an Antwerp commercial court.

The move, if approved, would grant the airline operator creditor protection for a period of six months, enabling it to restructure operations.

According to VLM’s CEO Hamish Davidson,  the company expected that the judicial reorganization would enable it to repay historical debts and suppliers and ensure the smooth running of daily operations.

KBC Bank’s decision to freeze VLM’s accounts on Wednesday last week triggered the filing, equivalent to Chapter 11 in the United States.

The airline’s debts reportedly included €3m ($3.4m) owed to the bank as well as an additional €3m owed to various suppliers which include the Antwerp Airport.

The operator had suffered a €13m ($14.7m) loss for its last financial year making it abandon plans to lease four SSJ 100-95 LRs from Russian lessor, the Ilyushin Finance Co., earlier this year.

At present, VLM operates eleven Fokker 50s (of which two are leased to each of Cityjet and flybe) on passenger charter flights as well as scheduled passenger flights between Belgium, Switzerland, Germany, the United Kingdom, Ireland, the Netherlands, Italy, and Norway.

Source:  Ch-aviation

Connacher seeks court protection 1 year after restructuring

Canada-based oilsands producer Connacher Oil & Gas Ltd was seeking protection from creditors one year after emerging from bankruptcy.

The company has submitted to the Court of Queen’s Bench, a proposal to shield it under the Companies Creditor’s Arrangement Act whilst it restructures its business which includes part or outright sale of the company.

During the company’s previous restructuring in May 2015, creditors holding $1bn of the Connacher’s debt ended up owning the entire company in a debt-to-equity swap transaction.

The company cited depressed oil prices as one of the main reasons for filing for bankruptcy in 2016. That combined with the restricted output from its oilsands project at Fort McMurray negatively impacted the company.

The company was exploring restructuring options in March 2016 and had also missed an interest payment on $35m of its debt which it had raised post-restructuring.

Source: Winnipeg Free Press

Breitburn Energy files for bankruptcy

U.S.-based energy firm Breitburn Energy Partners LP filed for Ch-11 bankruptcy, on being negatively impacted by falling oil prices. The company filed for restructuring in the U.S. Bankruptcy Court in New York, with reported assets of $4.7bn and debts of $3.4bn as of 31 March 2016.

According to company CFO James Jackson, the decision to file for bankruptcy was made when persistent negotiations with lenders failed and an out-of-court restructuring agreement would have affected the company’s liquidity severely.

The company has lined up a $75m DIP financing facility, and is in talks with senior lenders to include an additional $75m, if certain conditions were met.

A talking point during Breitburn’s restructuring would include its hedging assets, contracts that cushion the company’s cash holdings against oil price volatility. The company estimates that proceeds of its hedging agreements could be up to $500m, which, outside bankruptcy, could be “a significant source of liquidity.”

However, some of the Breitburn’s senior lenders have objected to the distribution of proceeds arising from hedging arrangements during bankruptcy as they are counter-parties to it.

Source: WSJ

SandRidge Energy files for Ch-11 bankruptcy

Sandridge Energy Inc. filed for Ch-11 bankruptcy in the U.S. Bankruptcy Court of Houston on reaching a debt-to-equity swap agreement with creditors. The swap would give its existing creditors control of the re-organized company.

Sandridge, which is the latest victim of falling oil prices, intends to finance its operations without securing a bankruptcy or a DIP loan. The company intends to conduct business normally whilst undergoing restructuring and intends to pay its operating expenses associated with production activities, royalties and wages to its workers and also intends to pay all of its suppliers and vendors.

At the time of filing for bankruptcy, the company had assets of $7bn and debt of about $4bn.

SandRidge is advised by law firm Kirkland & Ellis LLP, which is handling the chapter 11 case, and Houlihan Lokey Inc. is the company’s financial adviser.

Source: WSJ

SunEdison’s yieldcos given more time to file delayed reports

SunEdison Inc.’s yieldco’s TerraForm Power Inc. and TerraForm Global arranged for more time to file their financial reports for 2015, thus helping them avoid a potential technical default on their credit facilities. The agreement was approved by lenders on Tuesday.

TerraForm Power Inc. has until 28 May 2016, to file its annual financial results whereas TerraForm Global Inc. could get an extension period of almost 10 months, in exchange for reducing the size of its own revolving credit line to $350m from $485m.

As per an SEC-filing, TerraForm Power would also delay the release of its 1Q’16 report as it had identified “material weaknesses in internal controls over financial reporting,” including the valuation of costs of projects acquired from SunEdison and processing accounts payable and general and administrative expenses.

The yieldcos delayed releasing their annual reports partly due to the assistance needed from their bankrupt parent SunEdison, which also hasn’t filed its reports. Parent company SunEdison had sought bankruptcy protection in April 2016.

TerraForm Global did not provide a specific new deadline in the filing but it had until either 30 March 2017, or 10 business days before “failure to deliver such financial statements would constitute an event of default” for another debt, its senior notes due 2022, whichever came first.

Source: Bloomberg

Abengoa Netherlands files for bankruptcy

Abengoas Netherlands based subsidiary Abengoa Bioenergy Netherlands BV, filed for bankruptcy on Wednesday and shut its ethanol plant in Rotterdam.

The parent company of the Dutch subsidiary had also filed for bankruptcy in April 2016.

The Europoort ethanol plant, Abengoa’s largest in Europe, had a processing capacity of about 380,000 tonnes/year.

The company has appointed Borsboom & Hamm as its administrators, overseeing the bankruptcy proceedings.

Source: ICIS

Rajya Sabha passes India’s bankruptcy bill

India’s Rajya Sabha (Council of States or Upper House of Parliament) passed a new bankruptcy code on Wednesday.

The insolvency and bankruptcy code, earlier passed by the Lok Sabha, will strengthen lenders to recover outstanding debts by setting a deadline of 180 days for companies to pay or face liquidation.

Currently, over 70,000 liquidation cases are pending in debt recovery tribunals and courts.

Source: Reuters