Halcon Resources Corp. is filing for chapter 11 protection as part of a restructuring agreement with creditors — a move that could wipe out $1.8 billion of its debt and $222 million of preferred stock equity, Business Insider reported yesterday. The agreement would also reduce Halcon’s ongoing annual interest burden by more than $200 million. The shareholders affected by the restructuring include those holding third-lien notes due 2022, senior notes due 2020, senior notes due 2021, senior notes due 2022, convertible notes due 2020, and perpetual convertible preferred stock. The affected stakeholders would then receive shares of common stock, warrants, and/or cash. Halcon hopes that the restructuring agreement will be finalized soon, which will be executed as part of an “accelerated prepackaged chapter 11 bankruptcy filing.” Halcon is expected to operate as usual during the restructuring process, and pay all suppliers and vendors in full for goods and services provided.
Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition.