Restructuring Update and Revised Earnings Release Date
July 22 2016 - 05:04PM
Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”)
today provided an update on its restructuring plans as well as an
update on its second quarter earnings timing.
Restructuring Update
As previously announced, Halcón is pursuing a
balance sheet restructuring through an accelerated pre-packaged
Chapter 11 bankruptcy filing (the “Restructuring Plan”) as
contemplated in the Restructuring Support Agreement (“RSA”) entered
into with certain of the Company’s 13.0% 3rd Lien Notes due 2022
(the “3L Notes”), its three tranches of senior unsecured notes
comprised of its 9.75% Senior Notes due 2020, its 8.875% Senior
Notes due 2021, and its 9.25% Senior Notes due 2022 (collectively,
the “Unsecured Notes”), its 8.0% Convertible Note due 2020 (the
“Convertible Note”) and its 5.75% Series A Perpetual Convertible
Preferred Stock (the “Preferred Equity”, and together with the 3L
Notes, Unsecured Notes and Convertible Note, the “Affected
Stakeholders”). The terms of the Restructuring Plan are
essentially unchanged from the Company’s previous public
disclosures and are summarized in the table below.
|
Stakeholder |
Treatment |
Senior Secured Revolver |
- New or amended reserve based facility provided by existing
lenders |
2L Notes |
- Reinstated |
3L Notes |
- Fully equitized into 76.5% of the pro forma common equity |
- Receive $33.8 million in cash plus accrued and unpaid interest
through May 15, 2016 |
Unsecured Notes |
- Fully equitized into 15.5% of the pro forma common equity |
- Receive warrants for 4.0% of the pro forma common equity (4 year
term, exercise price based on $1.33 billion equity value) |
- Receive $37.6 million in cash plus accrued and unpaid interest
through May 15, 2016 |
Convertible Note |
- Fully equitized into 4.0% of the pro forma common
equity |
- Receive $15.0 million in cash |
- Receive warrants for 1.0% of the pro forma common equity (4 year
term, exercise price based on $1.33 billion equity value) |
Preferred Equity |
- Receive $11.1 million in cash |
Existing Common Equity |
- Receive 4.0% of the pro forma common equity |
On July 20, 2016, Halcón completed a 30-day
solicitation seeking support for the Restructuring Plan from the
Affected Stakeholders. The solicitation resulted in the achievement
of the necessary threshold consent levels from all Affected
Stakeholders required to consummate a Chapter 11 filing on a
pre-packaged, accelerated basis under the terms outlined
above. Final results of the solicitation are set forth
below.
|
|
Affected Stakeholder Class |
% of Class Voting In Favor Of Restructuring
Plan(1) |
|
|
|
% of Face
Value |
% of Holders |
|
3L Notes |
|
99.997 |
% |
|
99.350 |
% |
|
Unsecured Notes |
|
99.860 |
% |
|
97.970 |
% |
|
Convertible Note |
|
100.000 |
% |
|
100.000 |
% |
|
Preferred Equity |
|
99.300 |
% |
Not Applicable |
|
|
|
|
(1)
Threshold levels needed for acceptance under the bankrupty code are
at least 66.67% of |
|
the value
of voting stakeholders in each Affected Stakeholder class and more
than 50% of the |
|
number of
voting holders in each affected debt class (50% threshold does not
apply to |
|
Preferred Equity
class). |
|
|
|
|
In addition, the Company has reached an
agreement in principle with certain holders of its 8.625% and 12.0%
2nd Lien Notes due 2020 and 2022 (the “2L Notes”) regarding certain
amendments to the 2L Note indentures (the “2L Support Agreement”)
that would be implemented pursuant to a consent solicitation
conducted upon implementation of the Restructuring Plan.
Halcón has agreed to launch this solicitation no later than
30 days following the effective date of the Restructuring Plan (the
“2L Amendment”) in exchange for a commitment from each noteholder
to support the Restructuring Plan. The 2L Amendment will
revise certain of the covenants with respect to the Company’s
ability to incur additional first lien or parity lien indebtedness,
make certain payments on account of junior or unsecured debt, or
grant certain liens or security interests on account of parity lien
debt. Subject to the effective date of the Restructuring
Plan, Halcón has also agreed to pay to each 2L noteholder that
executes the 2L Amendment and supports the Restructuring Plan a
consent fee equal to 1.25% of the aggregate principal amount of
such holder’s outstanding 2L Notes. No final agreement has
been reached at this time with the 2L noteholders nor can there be
any assurances that a final agreement will be reached.
However, it is not necessary to have the 2L Support Agreement in
place for the Company to implement the Restructuring
Plan.
The consummation of the Restructuring Plan under
the terms outlined above is subject to customary risks associated
with a bankruptcy filing and the conditions and milestones set
forth in the RSA. As previously indicated the Company plans
to operate as usual during the restructuring process and will
continue to pay all royalty owners, suppliers and vendors in full
consistent with normal terms.
Second Quarter Earnings
Timing
Halcón has postponed reporting its second
quarter earnings and filing its Form 10-Q to a date no later than
August 9, 2016. As previously announced, the Company is not
planning to host a conference call this quarter.
About Halcón Resources
Halcón Resources Corporation is an independent
energy company engaged in the acquisition, production, exploration
and development of onshore oil and natural gas properties in the
United States.
For more information contact Quentin Hicks,
Senior Vice President of Finance & Investor Relations, at
832-538-0557 or qhicks@halconresources.com.
Forward-Looking Statements
This release may contain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Statements that are not strictly
historical statements constitute forward-looking statements
and may often, but not always, be identified by the use
of such words such as "expects", "believes", "intends",
"anticipates", "plans", "estimates", "potential",
"possible", or "probable" or statements that certain
actions, events or results "may", "will", "should", or "could" be
taken, occur or be achieved. Forward-looking statements are
based on current beliefs and expectations and
involve certain assumptions or estimates that
involve various risks and uncertainties that could cause
actual results to differ materially from those reflected in the
statements. These risks include, but are not limited to, the
ability to confirm and consummate a plan of reorganization in
accordance with the terms of the RSA; risks attendant to the
bankruptcy process, including the effects thereof on the Company’s
business and on the interests of various constituents, the length
of time that the Company might be required to operate in bankruptcy
and the continued availability of operating capital during the
pendency of such proceedings; risks associated with third party
motions in any bankruptcy case, which may interfere with the
ability to confirm and consummate a plan of reorganization,
potential adverse effects on the Company's liquidity or results of
operations; increased costs to execute the reorganization, effects
on market price of the Company's common stock and on the Company's
ability to access the capital markets, and the risks set forth in
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2015 and other filings submitted by the Company
to the SEC, copies of which may be obtained from the
SEC's website at www.sec.gov or through the Company's
website at www.halconresources.com. Readers should not place
undue reliance on any such forward-looking statements, which are
made only as of the date hereof. The Company has no duty,
and assumes no obligation, to update forward-looking
statements as a result of new information, future events
or changes in the Company's expectations.
Quentin Hicks
Phone Number: +1 832-538-0557
Email: qhicks@halconresources.com
Halcon Resources (NYSE:HK)
Historical Stock Chart
From Feb 2024 to Mar 2024
Halcon Resources (NYSE:HK)
Historical Stock Chart
From Mar 2023 to Mar 2024