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Ares Affiliate Among Financial Backers of Nuverra Bankruptcy Exit

August 14, 2017, 07:55 AM
Filed Under: Environmental Services

Nuverra Environmental Solutions, Inc. announced that, on August 7, 2017 the company and its material subsidiaries emerged from Bankruptcy protection under chapter 11 of the United States Bankruptcy Code. Pursuant to their Amended Joint Plans of Reorganizationc, which were confirmed by the United States Bankruptcy Court for the District of Delaware, the company eliminated over $500 million of previously outstanding debt.  The company believes that the completion of the chapter 11 cases allows the company to move forward with a solid financial foundation from which to support its operations through the continuing downturn in oil and gas drilling and into a market recovery.

At its emergence, the Nuverra entered into a $30 million Senior Secured Revolving Credit Facility and a $15 million Senior Secured Credit Facility provided by ACF FinCo I LP, an entity managed by Ares Management, L.P., and a Second Lien Term Loan Credit Facility of up to $26.8 million provided by certain affiliates of Ascribe Capital LLC and Gates Capital Management, Inc. These credit facilities, totaling over $70 million, will support the reorganized company's operations going forward.

Under the Plan, the company completed a debt-for-equity swap under which the Company's 12.5%/10.0% Senior Secured Second Lien Notes due 2021 were converted into newly issued common stock.  In addition, the Company's prior term loans and junior debtor-in-possession credit facility were converted into newly issued common stock, and a term loan conversion fee and exit financing commitment fee were satisfied through the receipt of newly issued common stock.  Holders of claims relating to the company's 9.875% Senior Notes due 2018 (the "2018 Notes") received newly issued common stock and warrants in satisfaction of their claims. All shares of the company's common stock and all other previously issued and outstanding equity interests in the company, and any rights of any holder in respect thereof, were cancelled and discharged on the Effective Date.

In addition, all administrative expense claims, priority tax claims, priority claims and asset-based lending facility claims were paid in full. Undisputed customer and vendor obligations will also be paid.

Mark D. Johnsrud, the Company's Chief Executive Officer and Chairman, commented, "I would like to thank our employees, customers and vendors for their loyalty throughout this process, as well as express appreciation for the overwhelming support of our lenders and noteholders, all of which has enabled us to complete a smooth and swift process in less than four months."

"We are very pleased to have the right capital structure to support our work going forward. Throughout this process, our priority has remained providing a critical service to the market with top-notch customer service. We have made important progress in aligning our cost structure with market demand while ensuring that we have the right talent and equipment to meet customers' needs, and that focus on operational excellence will continue."
The company's legal advisors included Shearman & Sterling LLP, Squire Patton Boggs (US) LLP and Young Conaway Stargatt and Taylor LLP.  Lazard Middle Market, LLC served as the company's financial advisor. AP Services, LLC served as the company's restructuring advisor.

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