Basic Energy has liquidity to continue uninterrupted operations and meet its obligations to suppliers, customers, and employees
FORT WORTH, Texas – Basic Energy Services, Inc. and subsidiaries announced that the company, its secured term loan lenders and secured asset-based revolver lenders, and certain of its unsecured bondholders have taken steps to enable the continuation of negotiations regarding a deleveraging transaction, according to a Basic Energy press release.
On Sept. 14, 2016, the Company entered into a forbearance agreement with over 81 per cent of the holders of the 7.75 per cent senior notes due 2019 with respect to the previously announced 30-day grace period related to an $18.4 million payment of interest under the 2019 Notes.
Under the forbearance agreement, the unsecured noteholders agreed to forbear from exercising their rights and remedies, including the right to accelerate any indebtedness, through September 28, 2016 in connection with the interest payment default.
Additionally, Basic Energy’s secured lenders agreed to provide temporary waivers of certain existing and future defaults under the Term Loan and ABL Facility related, in part, to the missed interest payment.
During the forbearance period, the company and its creditors have continued to make progress in their negotiations regarding a deleveraging transaction.
To provide Basic Energy with additional time to continue and conclude these discussions, the company has reached an agreement with over 81 per cent of the holders of the 2019 Notes to extend the Forbearance Period through Oct. 16, 2016.
Basic Energy’s Secured Lenders have also agreed to provide extensions of their respective temporary waivers through the Extension Period.
“We look forward to continuing our restructuring discussions with our Secured Lenders and unsecured bondholders during the Extension Period, and I am grateful to our creditors for their continued support and cooperation. The extension of the forbearance and temporary waivers will provide the time we need to accomplish a mutually acceptable financial restructuring plan that provides Basic with a sustainable capital structure that supports the Company’s long-term business plan and results in long-term value generation for the benefit of our employees, customers, vendors, and all other stakeholders,” said Roe Patterson, Basic’s CEO.
Basic Energy Services continues to have ample liquidity to continue efficient and uninterrupted operations in the ordinary course and meet all of its obligations to suppliers, customers, and employees.