Summary
Chesapeake Energy Corporation (the "Company") announced on June 29, 2020, that it, along with certain subsidiaries, entered into a Restructuring Support Agreement (RSA) on June 28, 2020, with certain holders of its debt obligations. This agreement is intended to support a comprehensive restructuring of the Company's balance sheet. Concurrently with the RSA, the Company voluntarily filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of Texas. The Company will operate as a debtor-in-possession and has secured a commitment for a $925 million debtor-in-possession (DIP) credit facility. This DIP facility, upon meeting certain conditions, can convert into a larger exit facility. The RSA outlines the proposed treatment for various creditor classes, with existing equity holders expected to receive no recovery.
Key Highlights
- 1Chesapeake Energy Corporation has entered into a Restructuring Support Agreement (RSA) with key stakeholders to facilitate a financial restructuring.
- 2The Company has filed for Chapter 11 bankruptcy protection as part of its restructuring plan.
- 3A commitment for a $925 million DIP credit facility has been secured to provide liquidity during the Chapter 11 process.
- 4The RSA details the proposed recovery for various classes of debt holders, including secured claims, revolving credit facility claims, term loan facility claims, and noteholders.
- 5Holders of Chesapeake's common stock are expected to experience a significant or complete loss of their investment as part of the restructuring.
- 6The Company will continue to operate its business as a debtor-in-possession under court supervision.
- 7The DIP credit facility may convert into a larger Exit Credit Facility upon satisfaction of certain conditions.