Houston-based Hi-Crush Inc. has extended its negotiation period with its creditors ahead of a planned bankruptcy filing, the Houston Business Journal reported. Hi-Crush fell into default on some of its debt on June 22, but it managed to reach a forbearance agreement with creditors, according to filings with the U.S. Securities and Exchange Commission. Forbearance periods are often used to create some breathing room within which debtors can negotiate the terms of a restructuring with their creditors. In fact, Hi-Crush said on June 25 that it had hired advisers to begin the groundwork for a bankruptcy filing and that it was looking to put together a prepackaged restructuring plan with its creditors. The forbearance period, during which creditors couldn’t take action based on the default, was set to expire on July 5, but the company and creditors agreed to extend it until the end of July 12, according to a July 6 SEC filing. Hi-Crush plans to file for bankruptcy protection whether its creditors agree to a restructuring deal or not, the company said in a June 25 press release. To respond to the downturn in market demand, Hi-Crush cut its workforce by about 60 percent since mid-March and reduced its 2020 capital expenditure expectations by nearly 40 percent compared to its initial guidance. The company started 2020 with 747 employees, and executives expected total 2020 capital expenditures to range between $45 million and $60 million as of February, prior to the global pandemic and oil price war.
