Oilfield services company, Expro, has handed in a “prepackaged” reorganization plan to a U.S. court as the next step of its financial restructuring.
The company has reached an agreement with its key lenders and shareholders to eliminate its entire $1.4 billion of funded debt and $80 million in annual interest payments through an equity conversion, which will fully deleverage its balance sheet.
This will provide a stronger and more sustainable capital structure to grow the business, and will be supported by an additional $200 million equity commitment from its new shareholders, Expro said in a statement on Monday.
In order to implement this agreement and make it binding on all parties, Expro has submitted a “prepackaged” plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code.
“This legal process provides the most efficient and effective means to deliver Expro’s financial restructuring, and the company is confident that it will be completed within 60 days,” said Expro.
Further according to the company, the “prepackaged” plan demonstrates overwhelming support from Expro’s lenders and shareholders for a consensual restructuring, providing a clear and expedited path to emergence. The process is solely focused on establishing a more sustainable capital structure and accessing growth capital—it will not impact Expro’s operations or relationships with employees, customers, business partners, or suppliers.
Mike Jardon, Expro’s Chief Executive Officer, commented: “We are thrilled to have received overwhelming support from our lenders and shareholders as we work to achieve our end goal: creating a stronger financial foundation for the future. This process will allow the company to deliver on its growth strategy, which includes our continued investment in customer-focused technology solutions that support the next generation of exploration, production, and development projects.
“There will be no interruption to our business operations and relationships, and we are communicating with all of our key stakeholders to ensure they stay informed of our progress. With the strong support of our lenders and shareholders, we are confident that our restructuring will move forward quickly and efficiently, and we greatly appreciate their support shown throughout.”
Under the plan of reorganization, Expro will be provided with access of up to $155 million in debtor-in-possession financing, including bonding lines, which will provide working capital to ensure normal business operations continue during the financial restructuring process.
Expro has made customary filings with the court, including first day motions, to help ensure a smooth transition into this legal process. The motions are expected to be addressed by the court promptly following the filing.