Ultra Petroleum Corp. (OTCMKTS:UPLMQ) has entered into a Plan Support deal dated November 21, 2016 and a Backstop Commitment deal dated November 21, 2016 with holders of a majority of the main amount of its due 5.750% Senior Notes payable in 2018 and 6.125% Senior Notes payable in 2024, and stockholders who own at least a part of its outstanding common stock or the interests therein.
As previously stated in April, Ultra Petroleum and its subsidiaries submitted voluntary petitions asking in-court restructuring under chapter 11. The PSA decides the terms and conditions dependent on which the company and the Commitment Parties have accepted to seek and back a joint arrangement of reorganization at a plan value of $6.25 billion, $6 billion , or $5.5 billion , reliant on commodity prices, for the company’s subsidiaries which will successfully close the Reorganization Proceedings.
The Backstop deal reports the terms and conditions following which the Commitment Parties have accepted to fund a $580 million rights offering to buy shares of common stock in restructured company in connection with the rights offering. Under the Plan, the enterprise worth of the Ultra Entities is seen at $6 billion; provided, that if the mean closing price of the 1-year Henry Hub natural gas strip rate during the seven trading days preceding the start of the Rights Offering solicitation is greater than $3.65 /MMBtu, or less than $3.25 /MMBtu.
Among other issues, the Plan offers for a comprehensive reorganization of all permissible claims against and interests in the company’s subsidiaries, including the conversion of the due unsecured senior notes released by Ultra Petroleum to newly-issued equities of common stock in company, the exchange of the due unsecured senior notes released by UPL’s subsidiary for new unsecured notes released by Ultra Resources and funds, and the payment in full of other permissible claims against the company’s subsidiaries in cash.