Pacific Exploration & Production Corporation announced the successful closing of a debtor-in-possession financing in the amount of U.S.$500 million (the "DIP Financing"), less applicable fees and charges, with: (i) certain holders of the Company's senior unsecured notes (the "Supporting Noteholders"); and (ii) The Catalyst Capital Group Inc., on behalf of investment funds managed by it ("Catalyst" and together with the Supporting Noteholders, the "DIP Lenders"). In addition, the Company entered into a U.S.$115,532,794 new letter of credit facility (the "Letter of Credit Facility") with certain lenders under the Company's pre-existing credit facilities (the "Supporting Bank Lenders", and together with the Supporting Noteholders, the "Supporting Creditors"). A SEDAR filing lists Wilmington Trust as administrative agent for the DIP Financing.
The closing of the DIP Financing and entering into of the Letter of Credit Facility are in furtherance of the Company's previously announced comprehensive restructuring transaction (the "Restructuring Transaction") with the Supporting Creditors and Catalyst that will significantly reduce debt, improve liquidity, and best position the Company to navigate the current oil price environment. The Restructuring Transaction has received support from approximately 79% of the aggregate principal amount of the debt held by the Company's noteholders and lenders under the Company's credit facilities.
"The closing of the DIP Financing and the entering into of the Letter of Credit Facility are a significant milestone for the Restructuring Transaction. We continue to work constructively with the Supporting Noteholders, Catalyst and other stakeholders to ensure that Pacific emerges from creditor protection as a stronger, more efficient company," commented Dennis Mills, Chair of the Independent Committee.
"The Catalyst Capital Group is excited to be the Creditors and Pacific's partner and provide financing to ensure the long-term viability of the company," said Gabriel de Alba, Managing Director and Partner of Catalyst. "Catalyst's philosophy is to invest in businesses we can build. A strong Pacific will play a key role in its countries of operation, to the benefit of all its stakeholders. We believe we can contribute greatly to rebuilding that strength."
As part of the DIP Financing, the Company has issued 6,250,000 warrants (the "Warrants") to the Supporting Noteholders that are exercisable at a nominal exercise price into common shares in the reorganized capital of the Company upon completion of the Restructuring Transaction.
The description of the DIP Financing, the Letter of Credit Facility and the Warrants herein is qualified in its entirety by the text of these documents, copies of which are available on the Company's SEDAR profile at www.sedar.com.