Endeavour Files for Swap to Cut Debt by $568 MillionBill Rochelle and Sherri Toub
Endeavour International Corp., an independent oil and natural gas exploration and production company, filed a Chapter 11 petition on Oct. 10 to implement a reorganization plan reducing debt $568 million by distributing new debt and stock for secured debt and convertible notes and bonds.
Properties in which Houston-based Endeavour has interests are principally in the North Sea. Third parties operate most of them. Financial difficulties were the result of technical problems, cost overruns, unforeseen capital expenditures, and delays in bringing new fields into production.
Endeavour had assets of $1.56 billion and liabilities totaling $1.55 billion on the June 30 balance sheet.
Before bankruptcy, the company negotiated the terms of a reorganization plan with holders of more than two thirds of the $404 million of first-lien debt, $150 million of second-lien debt, and $236 million in three issues of convertible bonds and notes.
First-lien creditors are to have $262.5 million in new 9.75 percent secured notes and $196 million in 3.5 percent convertible stock representing 66.3 percent of the new common equity if exercised.
Second-lien creditors are to have $41.4 million of the new convertible notes representing 14 percent of the common equity when exercised.
Existing convertible debt holders are to receive new convertible debt representing about 17 percent of the common equity if converted.
Endeavour said there is about $12 million owing to other unsecured creditors who are to receive a “de minimis” amount of common stock or whatever a creditors’ committee negotiates.
The $440 million secured debt, financing the U.K. operations, isn’t affected by the bankruptcy and isn’t in default. Offshore subsidiaries are not in Chapter 11.
The restructuring agreement requires filing the definitive plan and disclosure statement within 45 days and securing approval of the disclosure statement within three months. The plan must be approved with a confirmation order within 170 days of bankruptcy.
Endeavour’s first-lien debt last traded on Oct. 10 for 63.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $135 million in 5.5 percent convertible bonds last traded on Sept. 23 for 6 cents on the dollar.
Endeavour’s stock closed at 15.65 cents a share in New York trading on Oct. 10. The three-year high was $13.29 on March 19, 2012.
The case is In re Endeavour International Corp., 14-12308, U.S. Bankruptcy Court, District of Delaware (Wilmington).