Hi-Crush enters $48.1 million rights offering backstop commitment deal

By Caroline Salls

Pittsburgh, Aug. 18 – Hi-Crush Inc. entered into a backstop purchase agreement in connection with the rights offering to be conducted under its pre-arranged plan of reorganization, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Under the plan, the company said it intends to offer to eligible holders of its outstanding 9½% senior notes due 2026, including the backstop parties, and some other eligible holders of unsecured claims, subscription rights to purchase $48.1 million in new senior secured convertible notes with a 5½-year maturity upon its emergence from bankruptcy.

The backstop parties have committed to purchase the new senior convertible notes that are not subscribed for in the rights offering at a price equal to $1,000 per $1,000 in principal amount of notes purchased.

Hi-Crush said the backstop parties will receive a total of $4.8 million in additional new senior convertible notes in exchange for their commitment.

If any Hi-Crush debtor completes or announces its intention to enter into an alternate transaction or files any documents with the court in support of an alternate transaction, the company may be required to pay non-defaulting backstop parties $4.8 million as liquidated damages.

Hi-Crush is a Houston-based provider of proppant and logistics solutions to the oil and gas industry. The company filed bankruptcy on July 12 in the U.S. Bankruptcy Court for the Southern District of Texas under Chapter 11 case number 20-33495.

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