Basic Energy Services (BAS) Services Enters Forbearance Agreement, Obtains Waivers from Secured Lenders
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Basic Energy Services, Inc. (NYSE: BAS) ("Basic" or the "Company") and certain subsidiaries today announced that the Company, its secured term loan lenders and secured asset-based revolver lenders (collectively, the "Secured Lenders"), and certain of its unsecured bondholders have taken steps to enable the continuation of negotiations regarding a deleveraging transaction.
Specifically, the Company has entered into a forbearance agreement with over 81% of the holders of the 7.75% senior notes due 2019 (the "2019 Notes") with respect to the previously announced 30-day grace period related to an $18.4 million payment of interest under the 2019 Notes. The Company has elected not to make the interest payment upon the expiration of the 30-day grace period. Under the forbearance agreement, the unsecured noteholders have agreed to forbear from exercising their rights and remedies, including the right to accelerate any indebtedness, through September 28, 2016 in connection with the interest payment default.
Additionally, the Company's Secured Lenders have agreed to provide temporary waivers of certain existing and future defaults under the Term Loan and ABL Facility related, in part, to the missed interest payment. The forbearance and temporary waivers will provide the Company with additional flexibility to continue discussions with all its creditors with the objective of improving Basic's long-term capital structure.
Roe Patterson, Basic's President and Chief Executive Officer, stated, "I would like to express our appreciation to our Secured Lenders and unsecured bondholders for their continued support and cooperation. The forbearance agreement and temporary waivers will provide additional time to reach a mutually acceptable financial restructuring plan that provides Basic with a sustainable capital structure that supports the Company's long-term business plan and results in long-term value generation for the benefit of our employees, customers, vendors, and all other stakeholders."
The Company continues to believe that it has ample liquidity at this time to continue efficient and uninterrupted operations in the ordinary course and anticipates meeting all of its obligations to suppliers, customers, and employees.
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