OKLAHOMA CITY, Aug. 12, 2016 /PRNewswire/ -- Templar Energy LLC and its affiliates ("Templar" or the "Company") announced today that it has reached an agreement with holders of over 82% in amount of its second lien debt, 100% of its equity holders and 100% of its first lien RBL lenders on the terms of a financial restructuring that will result in the extinguishment of $1.45 billion in second lien debt, a new equity investment of $365 million, and an amended RBL credit facility with a $600 million borrowing base.
David D. Le Norman, President and Chief Executive Officer stated that, "management is extremely pleased with the outcome of the Company's negotiations with its lenders and the terms of the contemplated restructuring, which significantly deleverages the Company's balance sheet and will allow Templar to continue to operate seamlessly in a lower commodity price environment with no impact on its customers and vendors. We will work over the next several weeks to gain support from the rest of the second lien lenders in order to implement this transaction expediently on an out-of-court basis."
The Company and a majority of its holders of second lien debt and of its equity entered into a restructuring support agreement ("RSA") on July 15, 2016 which set forth the key terms of the restructuring and a timeline and process for its implementation. Under the terms of the RSA, second lien lenders will receive their pro rata share of approximately $133 million in cash plus approximately 45% equity in reorganized Templar (after dilution) and will also be eligible to participate in a rights offering of participating preferred equity in reorganized Templar. In total, the Company will raise $365 million in cash in the form of new participating preferred equity (which includes $145 million from certain legacy equity holders), the proceeds of which will be used to fund the cash consideration to each second lien debtholder, partially pay down Templar's RBL facility, pay transaction costs and expenses, and fund the Company's go-forward business plan.
In addition, Templar has secured commitments from 100% of its existing first lien RBL lenders for an amended, post-restructuring, credit facility. The terms of the amended credit facility include a new borrowing base of $600 million, with its first scheduled redetermination to occur on October 2017 and an extension of the facility maturity to September 2020.
Today, Templar began to solicit formal support for the restructuring plan from its lenders with the solicitation period to remain open until the end of August. The RSA contemplates that Templar may execute its restructuring plan on either a consensual out-of-court basis or through a prepackaged Chapter 11 proceeding. The Company firmly believes that an out-of-court process will be faster and more efficient than an in-court process; however, the Company has already received sufficient support from the second lien lenders to consummate the restructuring through a prepackaged Chapter 11 proceeding, and intends to pursue that path to the extent unanimous support is not obtained. The restructuring plan is expected to be concluded by the end of the third quarter, if effectuated out of court, or by the end of the year, if effectuated through a prepackaged Chapter 11 proceeding.
Templar is represented by Simpson Thacher & Bartlett LLP, as legal counsel, and its financial advisor is Evercore Group LLC. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.
Templar is an exploration and production company focused on investing primarily in the mature, liquids-rich producing basins in the Mid-Continent Region. Templar also evaluates opportunities outside the region which fit its economic criteria. Templar is headquartered in Oklahoma City, Oklahoma. Visit http://www.lenormanoperating.com for more information.
For more information about Templar, please contact:
(405) 548-1200 or firstname.lastname@example.org
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SOURCE Templar Energy LLC