Green Field Energy Services Inc., the oil-field service provider that defaulted on a loan last month, received court approval to borrow as much as $15 million, allowing the company to operate while it’s in bankruptcy.
U.S. Bankruptcy Judge Kevin Gross approved the financing today in Wilmington, Delaware. The company, which filed for bankruptcy Oct. 27, will return to court to seek approval of the rest of a $30 million debtor-in-possession loan from lenders including GB Credit Partners LLC and ICON Capital LLC.
Paul Leake, a lawyer representing a group of noteholders, said the group consented to the interim financing “not because we like it,” but because Green Field “needs a life line and it needs a life line right away.”
Leake advised the court that they will be objecting at the final hearing “if nothing changes” in the financing terms. Josef Athanas, an attorney at Latham Watkins LLP representing Green Field, told Gross he is “very hopeful we can all reach a deal.”
The financing is “clearly very necessary and as Mr. Leake said,” Green Field “really needs a life line at this point,” Gross said.
Green Field, based in Lafayette, Louisiana, listed assets and liabilities of as much as $500 million each in the Chapter 11 filing in U.S. Bankruptcy Court in Wilmington.
Green Field Energy defaulted on principal payment on a credit facility with an affiliate of Royal Dutch Shell Plc, triggering a cross default on $250 million of senior secured notes, Moody’s Investors Services Inc. said in a Sept. 9 report.
Moody’s cut its rating on about $200 million of Green Field Energy’s secured debt to Ca from Caa2, according to the report, and said the company didn’t have enough cash or cash flow to pay its obligations relating to interest expenses, mandatory debt amortization and capital spending.
The case is In re Green Field Energy Services Inc. 13-bk-12783. U.S. Bankruptcy Court, District of Delaware (Wilmington).