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Halcon Resources Corp (NYSE:HK) is on its way up with its restructuring efforts. Alongside some of its subsidiaries, the company has filed for voluntary petitions under Chapter 11 of the Bankruptcy Code. It had publicly announced of its overall balance sheet on which it will lay its efforts in pursuing a pre‐packaged plan of its reorganization. For a while now, Halcón has been petitioning for support of its pre-planned Restructuring Plan.

The company has been looking up to the Company’s 13.0% 3rd Lien Notes, its three tranches of its senior unsecured notes which make up to 9.75% Senior Notes as well as 8.875% Senior Notes. There is also the 8.0% Convertible Note and 5.75% Series A Perpetual Convertible Preferred Stock.

What does the Restructuring Plan seek to achieve?

Speculations indicate that the company will make a $1.8 billion riddance in long-term debt. It will also result in the reduction of annual interest expense by more than $200 million which will be a plus for HK. Existing holders of Halcón will also have everything to benefit from Restructuring Plan which will provide them with 4.0% of the common stock of the reorganized Company.

The company’s existing reserve-based credit facility has so far received a back up from individual lenders led by JP Morgan and Wells Fargo. They will be providing the company with a $600 million debtor in possession credit facility (DIP) but only after its approval by the court. The DIP’s commitment, the Exit’s Facility as well as Halcón’s current $359 million in cash is expected to provide the Company with sufficient liquidation during and after the restructuring process. 45-60 days is the projection of the time the Restructuring Plan will take to conclude.

Nevertheless, PJT Partners who is serving as a Halcón’s financial advisor will give further directions in consultation with Weil, Gotshal & Manges who is acting as legal counsel to the Company. The company will not halt any payment to its vendors or the royalty owners during the bankruptcy process.

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