FTS International Announces Agreement With Majority of Its Secured Debtholders on Restructuring Support Agreement to Convert Over $400 Million of Debt to Equity

by | in News | 0 comments

FTS International, Inc. (NYSE American: FTSI) (“FTSI” or the “Company”) today announced that it has entered into a restructuring support agreement (the “Agreement”) with approximately 75 percent of the holders of the Company’s 6.250% senior secured notes due 2022 (the “Secured Notes”) and approximately 64 percent of the Company’s secured debt claims. The Agreement outlines a comprehensive restructuring that will deleverage the Company’s balance sheet by $437.3 million and provide it with the financial flexibility to deliver results-oriented and innovative well completion solutions to its customers. Importantly, the Agreement contemplates that the Company’s vendors, suppliers, and customers will remain unaffected by the transaction.

Michael Doss, Chief Executive Officer, commented, “In recent months, we have worked diligently to cut costs and preserve liquidity under circumstances few people could have predicted. I am extremely pleased to announce this consensual deal with our Secured Noteholders which guarantees that we will remain a strong partner to our customers and suppliers going forward.” Mr. Doss continued, “We could not have reached this agreement without the support of our lenders, employees, customers, and suppliers and I thank you for that.”

To implement the restructuring, the Company and its subsidiaries, including FTS International Services, LLC, and FTS International Manufacturing, LLC, will commence voluntary cases under chapter 11 of the U.S. Bankruptcy Code and file a prepackaged chapter 11 plan of reorganization in the coming weeks. The Agreement provides that holders of the Secured Notes and lenders under the Term Loan will exchange their debt claims for $30.6 million in cash consideration and 90.1% of the equity of a reorganized FTSI. Existing holders of FTSI equity will receive the remaining 9.9% of the equity. Additionally, the consenting creditor parties to the Agreement have agreed to allow the Company to use existing cash to fund the chapter 11 cases and continue operations in the ordinary course, thereby preserving critical value for all stakeholders. The Company’s cash balance was $192.7 million as of August 20, 2020. Upon execution of the Agreement, consenting creditors will also receive a cash payment equal to 3% of the principal amount of secured debt claims held by the applicable consenting creditor, subject to the terms and conditions described in the Agreement. Upon completion of the transaction, the Company intends to enter into a new revolving exit facility on terms acceptable to the consenting creditors to provide working capital to support operations.

Comments (0)

No comments yet, but you can be the first

Leave A Comment

Find Out More

If you want more information on our products or have a general enquiry, please contact us.