Halcon Resources pre-packaged reorganization plan confirmed by court

By Caroline Salls

Pittsburgh, Sept. 8 – Halcon Resources Corp.’s pre-packaged plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the District of Delaware.

Thursday’s order also approved the disclosure statement related to the plan.

According to an 8-K filed with the Securities and Exchange Commission, Halcon expects to complete its emergence from bankruptcy immediately after all remaining conditions to effectiveness of the plan have been satisfied.

As previously reported, under the pre-packaged restructuring plan, the company will eliminate $1.8 billion in long-term debt and reduce annual interest expense by more than $200 million.

Also under the plan, holders of Halcon common stock will receive 4% of the common stock of the reorganized company, subject to dilution.

Senior secured revolving credit facility lenders will receive a new or amended reserve-based facility provided by existing lenders.

Second-lien notes will be unaffected and reinstated.

Third-lien notes will be fully equitized into 76½% of common equity, and holders will also receive $33.8 million of cash plus accrued interest through May 15.

Holders of unsecured notes will receive 15½% of the common equity, warrants for 4% of the common equity with a four-year term and an exercise price based on a $1.33 billion equity value and $37.6 million of cash plus accrued interest through May 15.

Holders of the company’s convertible notes will receive 4% of the common equity, $15 million of cash and warrants for 1% of the common equity with a four-year term and an exercise price based on a $1.33 billion equity value.

Holders of preferred equity will receive $11.1 million of cash.

Vendors, royalty owners and other parties were expected to be paid throughout the bankruptcy process.

Based in Houston, Halcon is an independent energy company focused on onshore oil and natural gas exploration. The company filed bankruptcy on July 27 under Chapter 11 case number 16-11724.

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