EP Energy secures plan support agreement with key creditors and commitment for significant new money investment

first_img Image: EP Energy has secured plan support agreement with key creditors. Photo: courtesy of rawpixel/Pixabay. EP Energy Corporation (“EP Energy” or the “Company”) (OTC Pink: EPEGQ) today announced that it has entered into a Backstop Commitment Agreement (the “Backstop Agreement”) and Plan Support Agreement (the “PSA”) with a number of its key creditors on the terms of a comprehensive restructuring plan (the “Plan”). The Backstop Agreement and PSA memorialize the terms of the previously disclosed agreement in principle reached on October 3, 2019, and will provide for, among other things: (1) a substantial reduction of the Company’s existing funded debt by approximately $3.3 billion, (2) a substantial reduction of the Company’s annual debt service obligations by up to $263 million, and (3) a $475 million rights offering, approximately $463 million of which is backstopped by parties holding approximately 52.0% of the Debtors’ 1.25L Notes and approximately 79.3% of the Debtors’ 1.5L Notes. In addition, the Company has entered into a commitment letter under which over 90% of the Company’s existing revolving loan lenders have committed to provide support for an approximately $629 million Senior Secured Exit Financing.President and Chief Executive Officer Russell Parker said, “We are pleased to have reached an agreement with a substantial group of our key creditors on a plan that will facilitate our goal of significantly reducing our debt and enhancing our long-term competitive position. This agreement demonstrates our creditors’ confidence in our business and will enable EP Energy to work through the financial restructuring process on an expedited basis as we continue our operations without interruption. The EP Energy team remains focused on improving operational execution and capital efficiency and positioning the Company to succeed in the current operating environment. We appreciate the continued dedication of our talented team of employees, and the partnership of our royalty owners, lessors, vendors and business partners.”As previously announced, EP Energy voluntarily filed for chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of Texas. EP Energy is continuing to operate in the normal course during the financial restructuring process. Source: Company Press Release Reorganization expected to reduce company’s existing debt by approximately $3.3 billionlast_img read more