C&J Energy files for bankruptcy to cut $1.4 bln in debt

Vantage Drilling

20/07/2016 22:09

July 20 (Reuters) - C&J Energy Services Ltd  CJES.N  filed 
for U.S. Chapter 11 bankruptcy protection on Wednesday with an 
agreement with its lenders to swap $1.4 billion in debt for 
ownership of the reorganized company. 
    Hamilton, Bermuda-based C&J drills wells and provides 
related services, and the filing comes four months after founder 
and Chief Executive Officer Josh Comstock died unexpectedly at 
age 46.  urn:newsml:reuters.com:*:nL1N16J18G 
    C&J joins more than 100 energy producers and service 
companies that have filed for bankruptcy in the past two years 
after a debt-funded boom turned to bust when oil prices 
collapsed. 
    The company filed for bankruptcy in Houston to implement an 
agreement reached with lenders who hold 83 percent of its credit 
facility debt, according to a company statement. 
    Under a previously disclosed plan, lenders will receive all 
the stock in a reorganized C&J, subject to dilution for 
management incentive awards.  
    Lenders will backstop a rights offering for up to $200 
million in stock in the reorganized company and provide a $100 
million loan, which will increase its liquidity, according to 
the plan. 
    The lenders include Ascribe Capital, Blue Mountain Capital 
Management, GSO Capital Partners, Silver Point Capital, Solus 
Alternative Asset Management and Symphony Asset Management, 
according to securities filings. 
    Equity holders will receive seven-year warrants that are 
convertible into 6 percent of the stock in the reorganized 
company, with a strike price of $1.55 billion, according to 
securities filings. 
    The plan is subject to court approval. C&J said it expects 
to emerge from bankruptcy within six months. 
    Most of the publicly traded energy-related companies that 
have filed for bankruptcy in the current commodity downturn have 
been exploration and production.   
    Bankrupt publicly traded service companies include CHC Group 
Ltd  61C1.MU , which provides helicopter flights for the energy 
sector, and offshore drilling providers Vantage Drilling Co 
 VTGDF.PK  and Hercules Offshore Inc  HEROQ.PK , which filed 
twice in less than a year. 
 
 (Reporting by Tom Hals in Wilmington, Del.; Editing by Matthew 
Lewis) 
 ((thomas.hals@thomsonreuters.com)(+ 1 610 544 2712)(Reuters 
Messaging: thomas.hals.thomsonreuters.com@reuters.net)) 
 
Keywords: C&J ENERGY SERVICES BANKRUPTCY/