Hi-Crush expects to file BK
Re: Hi-Crush expects to file BK
Sad to here. Going through the Chapter 11 process is not fun. If they can drag the process out until oil prices and well completions pick up they might be able to survive.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Hi-Crush expects to file BK
Ambiguous threat:
<< Regardless of whether the terms and conditions of a prearranged filing can be agreed upon with the debt holders, the Company expects to file for protection from its creditors under the United States Bankruptcy Code.>>
https://www.globenewswire.com/news-rele ... 25/2053773
<< Regardless of whether the terms and conditions of a prearranged filing can be agreed upon with the debt holders, the Company expects to file for protection from its creditors under the United States Bankruptcy Code.>>
https://www.globenewswire.com/news-rele ... 25/2053773
Re: Hi-Crush expects to file BK
They may be just using the threat of going into Chapter 11 to get their creditors to back off. IMO debt holders should do everything possible to avoid pushing a company into Chapter 11. Only the lawyers win in a bankruptcy. Interest payments stop as soon as a company files for Chapter 11 protections, but lawyers fees go thru the roof.
EVENTUALLY upstream companies will need to complete a lot more wells and they will need a lot of frac sand.
From the press release:
Liquidity
As of June 22, 2020, the Company had cash of $34.6 million. The Company borrowed $25.0 million under its senior secured revolving credit facility (the "ABL Credit Facility") during March 2020, and repaid all borrowings under the ABL Credit Facility during the second quarter of 2020.
Effective June 22, 2020, with the submission of its May 31, 2020 borrowing base certificate under the ABL Credit Facility, the Company was in default under the ABL Credit Facility due to its failure to be in compliance with the springing fixed charge coverage ratio financial covenant under the ABL Credit Facility (the "Specified Default"), which is triggered when the Company’s borrowing base decreases below a level specified in the ABL Credit Facility. Due to the Specified Default, Hi-Crush is currently unable to borrow any amounts under the ABL Credit Facility.
On June 22, 2020, the Company and certain of its subsidiaries entered into a forbearance agreement and amendment to the ABL Credit Facility (the "Forbearance Agreement") with the lenders under the ABL Credit Facility (the "ABL Lenders"), pursuant to which the ABL Lenders have agreed to forbear from exercising default-related rights and remedies with respect to the Specified Default until July 5, 2020 (which date may be extended with the consent of the ABL Lenders), and have required that the Company make a deposit of $12 million in a cash collateral account as a condition of the Forbearance Agreement. The occurrence or continuation of another event of default under the ABL Credit Facility, a breach of any representation or warranty in the Forbearance Agreement or the failure to comply with any term or agreement in the Forbearance Agreement, will result in the early termination of the forbearance period.
The Company has engaged advisors and has been in negotiations with holders of its 9.50% senior unsecured notes due 2026 and the ABL Lenders on terms and conditions of a prearranged bankruptcy filing. Regardless of whether the terms and conditions of a prearranged filing can be agreed upon with the debt holders, the Company expects to file for protection from its creditors under the United States Bankruptcy Code.
EVENTUALLY upstream companies will need to complete a lot more wells and they will need a lot of frac sand.
From the press release:
Liquidity
As of June 22, 2020, the Company had cash of $34.6 million. The Company borrowed $25.0 million under its senior secured revolving credit facility (the "ABL Credit Facility") during March 2020, and repaid all borrowings under the ABL Credit Facility during the second quarter of 2020.
Effective June 22, 2020, with the submission of its May 31, 2020 borrowing base certificate under the ABL Credit Facility, the Company was in default under the ABL Credit Facility due to its failure to be in compliance with the springing fixed charge coverage ratio financial covenant under the ABL Credit Facility (the "Specified Default"), which is triggered when the Company’s borrowing base decreases below a level specified in the ABL Credit Facility. Due to the Specified Default, Hi-Crush is currently unable to borrow any amounts under the ABL Credit Facility.
On June 22, 2020, the Company and certain of its subsidiaries entered into a forbearance agreement and amendment to the ABL Credit Facility (the "Forbearance Agreement") with the lenders under the ABL Credit Facility (the "ABL Lenders"), pursuant to which the ABL Lenders have agreed to forbear from exercising default-related rights and remedies with respect to the Specified Default until July 5, 2020 (which date may be extended with the consent of the ABL Lenders), and have required that the Company make a deposit of $12 million in a cash collateral account as a condition of the Forbearance Agreement. The occurrence or continuation of another event of default under the ABL Credit Facility, a breach of any representation or warranty in the Forbearance Agreement or the failure to comply with any term or agreement in the Forbearance Agreement, will result in the early termination of the forbearance period.
The Company has engaged advisors and has been in negotiations with holders of its 9.50% senior unsecured notes due 2026 and the ABL Lenders on terms and conditions of a prearranged bankruptcy filing. Regardless of whether the terms and conditions of a prearranged filing can be agreed upon with the debt holders, the Company expects to file for protection from its creditors under the United States Bankruptcy Code.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group