CorEnergy Enters Restructuring Support Agreement
Operations to Continue Uninterrupted, With No Impact to Customers, Employees or Vendors
“Restructuring our debt will help to right-size our capital structure for the smaller scale of the enterprise following the MoGas and Omega sale, building on our efforts to increase liquidity through a combination of asset sales and tariff increases,” said
Schulte continued, “As we move through the reorganization process, we intend to continue to meet all obligations to our valued customers, employees, vendors and partners, and we expect Crimson Pipeline will also continue to operate normally. Our case for rate relief before the
To implement the RSA, CorEnergy has filed a voluntary chapter 11 proceeding in the
The case is being filed on a prearranged basis to allow for rapid implementation of the RSA, with the RSA parties already having agreed to support the Company’s Plan of Reorganization. The proceeding is intended to facilitate a restructuring of the Company’s capital structure only, with no plans for trade impairment or other contract rejections. Consistent with the terms of the RSA, the Plan provides for the treatment for each creditor class as follows:
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Senior Notes: The Senior Notes will be exchanged for cash,
$45 million in new secured debt with a five-year term and a 12.0% coupon and approximately 89% of the equity in a reorganized CorEnergy, subject to dilution from the management incentive plan and adjustment based on final cash available upon emergence. - General unsecured claims (including trade claims): Paid in full in cash.
- Existing preferred equity: Holders of CorEnergy’s existing preferred equity and securities that are convertible into preferred equity will receive the remaining approximately 11% of the equity of the reorganized CorEnergy, also subject to dilution from the management incentive plan and adjustment based on final cash available upon emergence.
- Common stock: All outstanding common stock will be cancelled.
The Company aims to complete this restructuring process and emerge from bankruptcy in the second quarter of 2024 as a real estate investment trust. The RSA parties share a common commitment to strong corporate governance and robust disclosure that will facilitate the reorganized company’s plan to pursue trading on the OTC following emergence, providing enhanced liquidity to owners while reducing overhead expenses to a level commensurate with the reorganized company’s smaller size.
Additional information on the RSA will be filed on a Form 8-K with the
CorEnergy has retained
Court filings and information about the Chapter 11 case is available on a separate website (https://cases.stretto.com/corenergy) administered by CorEnergy’s claims agent, Stretto. Information is also available by calling (833) 345-0351 (Toll-Free) and (949) 340-5692 (International).
About
Forward-Looking Statements
Certain statements contained in this press release may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as those pertaining to the Company's filing of the voluntary Chapter 11 proceedings (the "Chapter 11 Case"), the Company's ability to complete the Plan of Reorganization and its ability to continue operating in the ordinary course while the Chapter 11 Case is pending. You can identify forward-looking statements by use of words such as "will," "may," "should," "could," "believes," "expects," "anticipates," "estimates," "intends," "projects," "goals," "objectives," "targets," "predicts," "plans," "seeks," or similar expressions or other comparable terms or discussions of strategy, plans or intentions. Although CorEnergy believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including, among others: risks and uncertainties regarding the Company's ability to successfully complete a restructuring under Chapter 11, including consummating the Plan of Reorganization contemplated by the RSA within the currently expected timeline or at all; the ability to negotiate definitive agreements with respect to the matters covered by the term sheets included in the RSA, the occurrence of events that may give rise to a right of any party to terminate the RSA and the ability to satisfy the conditions of the RSA; potential adverse effects of the Chapter 11 Case on the Company's business, liquidity and results of operations; the Company's ability to obtain timely approval by the
Source:
View source version on businesswire.com: https://www.businesswire.com/news/home/20240225399178/en/
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Investor Relations Contact
info@corenergy.reit
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