Bankruptcy Judge Brendan L. Shannon signed off on New Gulf Resources LLC's restructuring plan, allowing the troubled energy company to wipe roughly $590 million of debt from its balance sheet and to move closer to exiting chapter 11 protection, Dow Jones Daily Bankruptcy Review reported yesterday. The reorganization plan will allow New Gulf, which sought chapter 11 protection late last year, to convert about $590 million in secured and unsecured bonds into equity. New Gulf will issue $135.25 million in new first-lien bonds to its creditors, and some of the new debt will be used to pay down the company's $75 million bankruptcy loan. That loan, from a group of New Gulf's second-lien bondholders, was used to fund the costs of the restructuring and to repay $38 million owed to senior lender MidFirst Bank. The chapter 11 plan will leave New Gulf in the hands of its two bondholder groups. Second-lien bondholders, owed $365 million in principal, will receive about 87.5 percent of New Gulf's new equity and the holders of subordinated paid-in-kind bonds, owed $162 million, will take a roughly 12.5 percent stake. Read more. (Subscription required.)
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