Nuverra Environmental Solutions, Inc. (“Nuverra” or the “Company”) (NESC) announced today that the Company and its subsidiaries (collectively, the “Nuverra Parties”) have filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), pursuant to the terms of the previously announced Restructuring Support Agreement (the “RSA”) between the Company and the holders of 100% of the existing term loan debt (the “Term Loan”) and approximately 86% of the Company’s 12.5%/10.0% Senior Secured Second Lien Notes due 2021 (the “2021 Notes”), to restructure the Company’s outstanding indebtedness pursuant to a prepackaged plan of reorganization (the “Plan”). The Company will continue to operate the business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and expects to continue existing operations as normal throughout the chapter 11 proceedings. The Company’s prepetition secured asset-based lenders and secured Term Loan lenders have also agreed, subject to the Bankruptcy Court’s approval, to provide $44 million in debtor-in-possession financing during the restructuring process to maintain operations. Pursuant to the RSA, the Company commenced a solicitation (the “Solicitation”) of votes for the Plan on April 28, 2017.
The Nuverra Parties filed various “first day” motions with the Bankruptcy Court seeking approval of relief that allows the Nuverra Parties to continue operations in the ordinary course of business, including requesting Bankruptcy Court authority to continue paying vendors and to continue providing employee wages, salaries and benefits without interruption. The Company expects to emerge from the chapter 11 proceedings with significantly reduced debt.
Mark D. Johnsrud, the Company’s Chief Executive Officer and Chairman, commented, “We’re pleased that the Company has overwhelming support for the Plan from our Term Loan lenders and 2021 noteholders. Today’s filing is the start of a quick-moving Bankruptcy Court process that will allow the Company to decrease its debt burden by nearly $500 million to a supportable level. We appreciate the loyalty of our employees, customers and vendors and are committed to continuing to meet customer needs without interruption while providing excellent customer service. With a new financial foundation, the Company will have the strength and flexibility to be able to support its operations through the downturn and beyond.”
Key elements of the Plan include:
- $44 million of debtor-in-possession financing provided by the lenders under the Company’s asset-based lending facility and Term Loan;
- Payment in full of all administrative expense claims, priority tax claims, priority claims and asset-based lending facility claims;
- Payment of undisputed customer and vendor obligations;
- Conversion of $75 million in Term Loan claims into newly issued common stock;
- Conversion of the 2021 Notes into newly issued common stock and rights in the rights offering;
- Cancellation of the Company’s 9.875% Senior Notes due 2018 and existing common stock;
- A rights offering provided to the holders of the 2021 Notes and the 2018 Notes, in the aggregate, of $150 million of new common stock of the reorganized Company; and
- Exit financing, to the extent necessary.
The Company’s legal advisors include Shearman & Sterling LLP, Squire Patton Boggs (US) LLP and Young Conaway Stargatt and Taylor LLP. The Company’s financial advisor is Lazard Middle Market, LLC. AP Services, LLC is serving as the Company’s restructuring advisor.
More information can be found in the Company’s Form 8-K being filed with the Securities and Exchange Commission today. Information about the restructuring can be found online at https://cases.primeclerk.com/nuverra or by calling 1-888-369-8913.
Nuverra Environmental Solutions, Inc. is among the largest companies in the United States dedicated to providing comprehensive, full-cycle environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations. Our strategy is to provide one-stop, total environmental solutions and wellsite logistics management, including delivery, collection, treatment, recycling, and disposal of solid and liquid materials that are used in and generated by the drilling, completion, and ongoing production of shale oil and natural gas. The Company provides its suite of environmentally compliant and sustainable solutions to customers who demand stricter environmental compliance and accountability from their service providers. Find additional information about Nuverra on the Company’s website, http://www.nuverra.com, and in documents filed with the U.S. Securities and Exchange Commission (“SEC”) at http://www.sec.gov.