On 23 May 2016, Chaparral Energy received commitment from banks to provide it funding of $100m as part of the restructuring process.
Chaparral would continue to engage with all its lenders to achieve an agreement on terms of its restructuring.
The company provided a version of its restructuring proposal to certain members of an ad hoc committee of unsecured noteholders but after evaluating, the noteholders rejected the proposal.
It appears that the terms of the consensual restructuring may or may not involve an equity offering.
U.S-based oil and gas producer Chaparral Energy Inc. has reached a temporary agreement with lenders, buying it additional time to complete negotiations.
As per a regulatory filing, Chaparral stated that it had reached a forbearance agreement with senior bond holders and other lenders who agreed to not exercise their right to call the notes at least until 15 April 2016.
Previously, Chaparral missed an interest payment of $16.5m despite a 30-day grace period after its independent auditors had “substantial doubts” over the company’s ability to continue as a going concern.
Chaparral owed $1.6bn in debt to creditors as of December 2015. The company had drawn another $141m in February, maximizing its credit limit. Cash on the company’s books as of March 2016 was $176m.
According to sources, U.S.-based private oil and gas firm Chaparral Energy would miss a mandatory 1 April 2016 coupon payment on its $300m bond.
Separately, the company, in its FY 2015 annual filing stated that it may look at the possibility of filing for a Chapter 11 bankruptcy.
Further, Chaparral had, on 1 March 2016, missed a $16.5m interest payment on another bond, kicking off a 30-day grace period.
As per its FY 2015 filing, Chaparral generated a net loss of $1.3bn for the period and had about $1.6bn in debt.
Chaparral drew down the balance on its $548m RCF in February. The lenders will re-determine the credit facility on 1 May 2016, and it expects its borrowing base to decrease significantly.
The company would then repay the outstanding balance within 30 days or in six monthly installments.