Templar Energy Avoids Bankruptcy Through a $1.45 billion Debt Restructuring

by San Antonio Attorney

Templar Energy LLC managed to reorganize its $1.45 billion debt and eluded bankruptcy by getting a unanimous approval for its reorganization plan.

According to the natural and gas producer based in Oklahoma City, its second lien lenders forgave $1.45 billion worth of debt by giving them 45% equity in the new company plus $133 million in cash.

Templar generated $365 million in fresh preferred shares and obtained adjusted credit assistance with $600 million borrowing base.  The income from the sale of preferred equity was partially used to resolve the second lien debt, repayment of the company’s loan and for the expenses and costs of the transaction.

Templar CEO David D. Le Norman has said that the company’s are happy with the undivided support it has gotten, allowing Templar to effortlessly execute the transaction and still remain liquid.

The company revealed the reorganization plan in August when the majority of its second lien lenders had agreed with the plan.  At that time, Templar announced that its plan to file for reorganization bankruptcy before the year ends if an agreement could not be made outside of court.

About nine natural gas and oil companies from Oklahoma have sought for bankruptcy protection within the past year as the slump in commodity prices have weakened the industry and cause it to be hard for companies with high levels of debt to keep up with their repayments.  The 9 energy companies that went bust had a sum of over $14.3 billion in liabilities.

Filing for bankruptcy can help restructure or eliminate certain types of debts while under the bankruptcy court’s protection.  Small businesses and individuals frequently file under Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code.  Filing Chapter 7 bankruptcy can discharge different types of debts, while filing Chapter 13 bankruptcy can reorganize debts by means of a court-approved repayment plan.

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