Nine Point Energy seeks court approval of amendment to DIP facility

By Sarah Lizee

Olympia, Wash., Aug. 4 – Nine Point Energy Holdings, Inc. is seeking an amendment to its debtor-in-possession facility, according to an emergency motion filed with the U.S. Bankruptcy Court for the District of Delaware.

The amendment would incorporate excess cash flow sweep provisions requiring the debtors to pay to the DIP agent any cash and/or cash equivalents in excess of $17 million plus additional amounts necessary to pay expenses/establish reserves approved by the required DIP lenders.

The excess cash flow sweep requirements will be tested every two weeks, beginning on the later of Aug. 10 and the date of entry of an order granting the motion.

The amendment would also require the debtors to make certain previously authorized adequate protection payments reflecting accrued quarterly interest under the pre-petition credit agreement, including the payment due on June 15, 2021 (which the lenders agreed to defer to Aug. 2), and an additional adequate protection payment representing interest under the pre-petition credit agreement that has accrued since June 15 in the amount of $1.81 million.

The amendment would also require the debtors to use reasonable best efforts to close their asset sale by the facility’s maturity date, which is Aug. 9.

As previously reported, the total amount of new money under the facility is $20 million, with the $13 million of interim financing having been funded following the interim order, another $5 million funded following the final order, and a further $2 million bridge commitment available 60 days after the petition date. The bridge commitment would only be funded if the company’s approved budget reflected an average weekly ending cash balance of $7.5 million or less over the period starting on the week in which the funding would occur and the week ending July 9.

The pre-petition roll-up amount is $60 million.

Interest is one-month Libor plus 750 basis points. The facility is subject to a 1% Libor floor and a 2% commitment fee. The default rate would be 200 bps above the non-default rate.

Pre-petition agent AB Private Credit Investors LLC is the DIP agent.

A hearing is scheduled for Thursday.

The Denver-based exploration and production company filed bankruptcy on March 15 under Chapter 11 case number 21-10570.

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