Basic Energy Services (BAS) Files for Chapter 11 Bankruptcy; Appoints New Chief Restructuring Officer

October 25, 2016 6:14 AM EDT

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Basic Energy Services, Inc. (NYSE: BAS) and certain subsidiaries announced that they had filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the District of Delaware to pursue a prepackaged plan ("Prepackaged Plan") of reorganization in accordance with its previously announced restructuring support agreement with creditors to effectuate a comprehensive balance sheet restructuring (the "RSA").

The RSA and Prepackaged Plan provides for a substantial deleveraging transaction pursuant to which Basic will meaningfully improve its balance sheet by equitizing over $800 million of its existing unsecured bond obligations and will substantially bolster its liquidity position through a $125 million rights offering for mandatorily convertible debt, to be backstopped by certain unsecured noteholders. Basic's prepetition secured term loan lenders and certain of its unsecured bondholders have also agreed, subject to the Court's approval, to provide a $90 million debtor-in-possession credit facility (the "DIP Financing") to help fund the costs of the restructuring.

Basic's creditors throughout its capital structure overwhelmingly support the restructuring. Pursuant to the RSA, 100% of Basic's prepetition secured term loan lenders and holders of over 80% of its 7.75% senior notes due 2019 and 7.75% senior notes due 2022 have agreed to vote in favor of the Prepackaged Plan.

The Company began the solicitation of votes on the Prepackaged Plan prior to filing its petition and currently estimates that it will emerge from the Chapter 11 reorganization before the end of 2016.

Basic will continue to operate the business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and fully expects to continue existing operations and maintain staffing and equipment as normal throughout the court-supervised financial restructuring process. Basic has filed a series of motions with the Bankruptcy Court requesting authority to continue normal operations, including requesting Bankruptcy Court authority to continue paying employee wages and salaries and providing employee benefits without interruption. The Company continues to work closely with its suppliers and partners to ensure it meets ongoing obligations and business continues uninterrupted.

Roe Patterson, Basic's President and Chief Executive Officer commented, "After much thought, we decided that Chapter 11 proceedings were necessary to create financial stability which will allow Basic to be a formidable competitor during the cyclical nature of our industry.

"Throughout the Chapter 11 process, we anticipate meeting ongoing obligations to our employees, customers, vendors and suppliers, and others. We will continue to provide our customers with the dependable, high-quality services which Basic is known for."

To support and effect the restructuring, Basic has retained Weil, Gotshal & Manges LLP as legal counsel and Moelis & Company as financial advisor.

Additionally, the Company engaged David Johnston of AP Services, LLC (and a Managing Director at AlixPartners LLP) as Chief Restructuring Officer. Mr. Johnston is supported by a team including Charles Braley and Brian Huffman as Senior Vice President and Vice President of Restructuring, respectively.

As noted above, the RSA anticipates that the restructuring would be implemented through the Prepackaged Plan, which remains subject to Bankruptcy Court approval and the satisfaction of conditions laid out in the Prepackaged Plan.

Additional information regarding Basic's restructuring is available at www.basicenergyservices.com/restructuring. Basic has also established a telephone hotline and e-mail address to respond to inquiries from interested parties regarding the restructuring. The telephone hotline is 844-801-5971. The e-mail address is restructuring@basicenergyservices.com.



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