Vista Proppants and Logistics in bankruptcy, lenders to sponsor plan

By Caroline Salls

Pittsburgh, June 10 – Vista Proppants and Logistics, LLC filed Chapter 11 bankruptcy Tuesday in the U.S. Bankruptcy Court for the Northern District of Texas.

According to a company news release, Vista intends to use the reorganization cases to restructure debt from its balance sheet, substantially deleveraging its capital structure and positioning the company for long-term success given the current significantly depressed industry environment.

The company said it currently estimates that it will emerge from the Chapter 11 reorganization within roughly 120 days and fully expects to operate as normal when the oil and gas industry rebounds.

In conjunction with the bankruptcy filing, Vista said it has secured an $11 million debtor-in-possession credit facility from its senior lenders to finance the costs and limited business operations during the restructuring process, including meeting obligations to employees, vendors and other constituencies.

Ares Capital Corp. is the DIP financing agent.

The facility is scheduled to mature 180 days after the bankruptcy filing date.

Interest will accrue at Libor plus 950 basis points.

The company is seeking interim access to $3.5 million of the DIP financing.

Vista said its senior lenders are fully-supportive of the bankruptcy filings and expect to sponsor a plan of reorganization to facilitate a prompt exit from Chapter 11.

“Today’s Chapter 11 filings represent a significant milestone in our financial restructuring process to significantly strengthen our financial condition by reducing debt, enhancing liquidity and best positioning our company to weather the storm and proactively respond when the market begins to recover,” chief financial officer Kristin Whitley Smith said in the release.

“After thoroughly evaluating our options and strategic alternatives with our advisors and board of directors, we are confident that this is the best path forward for Vista and our stakeholders.”

Vista filed several motions seeking to reject executory contracts.

According to those motions, the company’s business operations have historically involved producing and transporting mine-to-wellhead fine-grade frac sand for oil and gas well completion in Texas and Oklahoma.

The contracts covered by the rejection motions were entered into with various vendors and service providers and are no longer necessary for Vista’s ongoing business operations, the motions said.

According to court documents, Vista has up to $50,000 in assets and $100 million to $500 million in debt.

No unsecured creditors were listed with claims of $1 million or more.

Haynes and Boone, LLP is representing the company in its Chapter 11 cases. Alvarez & Marsal North America, LLC is serving as Vista’s chief restructuring officer.

Vista Proppants and Logistics is a Fort Worth-based pure-play, in-basin provider of frac sand solutions in prolific producing regions in Texas and Oklahoma. The Chapter 11 case number is 20-42002.

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