Memorial Production Partners LP (NASDAQ:MEMP) announced that it has begun implementing the financial restructuring as contemplated under Plan Support Agreements with the lenders and note holders. As the company inches closer to bankruptcy, Memorial Production Partners said that it has voluntarily submitted for reorganization under United States Bankruptcy Code’s Chapter 11.
The company had given the plea for restructuring to United States Bankruptcy Court for the Southern District of Texas, Houston Division. The company believes that the production or operations shall work as normal.
Memorial Production Partners said that this shall be a court-supervised financial restructuring process, where it hopes to continue working across the asset base as normal.
Plan Support Agreement
There has been a Plan Support Agreement in place with the note holders. The company announced that this agreement has received a nod from holders of around 69% of the Partnership’s 7.625% senior notes due 2021. Also giving a green signal to this agreement are the Partnership’s 6.875% senior notes due 2022.
A separate Plan Support Agreement and the general restructuring, company says, has also been acknowledged by the lenders who have 100% loans as a part of its revolving credit facility.
About the expected financial restructuring
Memorial Production Partners says that this financial restructuring will help it do away with debt worth $1.3 billion from the balance sheet. There is a hope for further financial flexibility, says the company.
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On this matter, the company’s President and CEO, William J. Scarff said, “we are implementing our financial restructuring plan” with an approval from lenders and note holders. He added that the agreements will provide a clear path for reduced debt and long term success of company.
It must be noted that the company has enough liquidity for continuing with its operations. The general obligations of this company are also expected to continue as normal with the available liquidity. The company is hoping for better operational result in the times to come.
