FORT WORTH, TX / ACCESSWIRE / May 26, 2020 / Titan Energy, LLC (OTC PINK:TTEN) (the "Company") today announced that the Company and certain of its subsidiaries have entered into a comprehensive restructuring support agreement (the "RSA") with key stakeholders, including the agent under the Company's first lien credit facility (the "First Lien Agent"), holders of a majority of its first lien claims (collectively, the "Consenting First Lien Lenders"), holders of 100% of its second lien claims (collectively, the "Second Lien Lenders"), and certain holders representing approximately 25% of the outstanding equity of the Company (the "Consenting Equity Holders," and together with the First Lien Agent, the Consenting First Lien Lenders and the Second Lien Lenders, the "RSA Parties").
The RSA contemplates a sale of substantially all of the Company's remaining assets, including its oil-and-gas properties in the Eagle Ford Shale, and provides for the subsequent dissolution and winding up of the Company (the "Restructuring").
The RSA also contemplates soliciting (the "Consent Solicitation") consents and agreements (the "Consents") from holders of record of the Company's common shares as of the May 21, 2020 record date. If the Consents are obtained from holders controlling a majority of the votes for the outstanding shares (such holders that return a Consent by the Consent Solicitation deadline of June 18, 2020, the "Consenting Shareholders"), then, subject to the terms and satisfaction of the conditions set forth in the Consent Solicitation Statement (as defined below) (including the closing of the Eagle Ford Shale divestiture (the "Eagle Ford Sale") with sufficient proceeds as set forth in the Consent Solicitation Statement), the RSA Parties have agreed to pay, or cause to be paid, a "Consent Payment" to Consenting Shareholders from the sale proceeds, which is anticipated to be between $0.03 and $0.10 per common share.
The sale of the Company's Eagle Ford Shale position, which represents a sale of substantially all of its remaining assets, is expected to generate approximately $8.5 million in net proceeds to Titan. The RSA provides for the Consent Payment to Consenting Shareholders despite the more than $400 million of secured debt currently on Titan's balance sheet.
Under the RSA, if the requisite Consents are not received by the June 18, 2020 Consent Solicitation expiration date (as such date may be extended), the First Lien Agent is authorized to exercise and enforce any and all rights and remedies available under the First Lien loan documents to force the Company and its subsidiaries to consummate the Eagle Ford Sale. No consent of the Company's shareholders is required in connection with such action by the First Lien Agent, and the Consent Payment would not be paid if such action is taken by the First Lien Agent.
In light of the level of indebtedness and other liabilities of the Company, holders of common shares should not expect to receive any distribution of proceeds from the Company prior to or in connection with any dissolution, winding-up and liquidation of the Company. The only payment shareholders are likely to receive is such shareholder's pro rata portion of the Consent Payment per common share if the requisite Consents and the payment conditions are satisfied.
All statements herein regarding the Consent Solicitation are qualified by reference to the Consent Solicitation Statement, dated May 21, 2020 (the "Consent Solicitation Statement"), a copy of which can be obtained from Broadridge. Any questions should be addressed to Broadridge, who is serving as the solicitation agent in connection with the Consent Solicitation, at (888)789-8409 or [email protected].
Advisors
Skadden, Arps, Slate, Meagher & Flom, LLP, Alvarez & Marsal, Perella Weinberg Partners LP, Paul Hastings LLP, and Shearman & Sterling, LLP are the advisors for the Company.
Forward-Looking Statements
This press release contains forward-looking statements which may include statements regarding the Consent Solicitation, the RSA, the Restructuring, including the outcome of any Restructuring pursuant to the RSA, the Eagle Ford Sale, including the proceeds related thereto, any other sale of assets, or dissolution or liquidation of the Company and/or Titan Energy Operating, LLC, the outcome of the Consent Solicitation and any other plans and strategies of the Company, and the making of the Consent Payment pursuant to the terms of the RSA, including the per share amount or timing of the payment, the obligation of the First Lien Agent to pay, or cause the payment of, such payment, or whether such payment is actually paid. These statements relate to expectations, beliefs, intentions or strategies regarding the future. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Subject to any continuing obligations under applicable law, we disclaim any obligation or undertaking to publicly update or revise any forward-looking statement or to reflect any change in management's expectations with regard thereto after the date hereof of any change in events, conditions or circumstances on which any such statement is based.
PRESS RELEASE
Contact: Investor Relations
(877) 280-2857
(215) 405-2718 (fax)
SOURCE: Titan Energy, LLC