EOTT makes prepackaged Chapter 11 filing, noteholders to receive new notes, equity

New York, Oct. 9 - EOTT Energy Partners LP made a prepackaged Chapter 11 filing in the U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division.

Under the proposed reorganization plan, holders of the Houston oil marketer and transporter's existing bonds will receive a combination of new notes and equity.

EOTT also said it has received a commitment for $575 million of debtor-in-possession financing from its lenders.

The filing has "the full support" of EOTT's bank lenders, a majority of its bondholders and Enron Corp., the company said.

Under the restructuring plan EOTT said it will significantly reduce its debt, restructure its finances and formalize a complete legal separation from Enron. It expects to complete the process by early 2003.

Holders of the existing $235 million of 11% senior unsecured notes will receive $100 million of 9% senior unsecured notes and new equity units.

Holders of the existing equity units will receive 3% of the new equity units and warrants to buy a further 7%.

EOTT will convert to a Limited Liability Company from its current Master Limited Partnership structure.

The DIP financing is $100 million more than the company's current working capital facility. It is made up of a $400 million working capital facility, including $325 million for letters of credit, with a six-month term and commitments for an additional 18 months post-bankruptcy, subject to final covenant negotiations. Also included in the facility is a $175 million repurchase/accounts receivable financing with a six-month term and commitments for an additional six months post-bankruptcy.

EOTT will completely separate from Enron, making a $1.25 million payment and issuing a $6.2 million note to Enron. Enron's claims of more than $50 million against EOTT will be eliminated and EOTT will no longer pursue claims against Enron.

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