Altera Infrastructure files for Chapter 11

BY Fraser Tennant

In a move designed to deleverage its balance sheet and position it for long term growth and success, global energy infrastructure services group Altera Infrastructure has filed for Chapter 11 bankruptcy so that it may implement a restructuring support agreement (RSA).

The RSA has been signed, or agreed to in principle by, holders of 80 percent of its funded debt obligations, which includes Brookfield Business Partners and approximately 91 percent of its bank lenders pending certain creditors’ internal credit approval processes.

The terms of the RSA contemplate more than $1bn of secured and unsecured holding company debt, $400m of preferred equity and $550m of secured asset-level bank debt, a comprehensive reprofiling of Altera’s bank loan facilities to better align cash flow with debt service obligations and the continued support of Altera’s equity sponsor, Brookfield.

In addition, Altera has obtained a commitment from Brookfield for a $50m debtor in possession (DIP) financing to help fund Altera’s restructuring process and ensure ordinary course operations remain unimpaired during the Chapter 11 process.

In conjunction with the petitions Altera has filed a series of motions, which, once approved by the bankruptcy court, will enable Altera to operate its business in the ordinary course without interruption. “We enter into this phase of our balance-sheet restructuring with the support of the majority of Altera’s secured lenders and equity sponsor Brookfield,” said Ingvild Sæther, chief executive of Altera Infrastructure Group Ltd.

A leading global energy services provider to the oil and gas industry, Altera focuses on supplying critical infrastructure assets to its customers in the offshore oil and gas regions of the North Sea, Brazil and the East Coast of Canada.

Altera’s fleet of 41 vessels includes floating production, storage and offloading units, shuttle tankers, long-distance towing and offshore installation vessels, as well as a unit for maintenance and safety.

Ms Sæther concluded: “We are confident that the Chapter 11 process will result in a comprehensive recapitalization transaction that will not only stabilise liquidity, but also deleverage our balance sheet and better position Altera for future growth.”

News: No impact to employees as Altera Infrastructure announces Chapter 11 bankruptcy

Space company Masten files for Chapter 11

BY Fraser Tennant

Signalling serious financial distress and putting at risk a NASA-funded mission to send one of its landers to the surface of the moon, pioneering NewSpace company Masten Space Systems has filed for Chapter 11 bankruptcy.

Masten is one of five companies that had won contracts from NASA to deliver payloads to the lunar surface. NASA issued an award originally valued at $75.9m to Masten in April 2020 to deliver a suite of experiments to the lunar surface using its XL-1 lander.

However, the NASA contract did not cover the entire cost of mission and Masten had difficulty raising additional funds by finding private payloads to fly to the lunar surface. Originally scheduled for 2022, the mission was pushed back to November 2023 because of what the company said in June 2021 were pandemic-related supply chain issues.

“NASA received notification its payloads slated for delivery aboard Masten Mission One may be impacted by Masten business operations,” said NASA in a statement. “The agency is working closely with the company to ensure that any potential changes comply with federal acquisition regulations. In the event Masten is unable to complete its task order, NASA will manifest its payloads on other flights.”

According to the Chapter 11 filing, Masten, based in Mojave, California, has estimated assets of between $10m and $50m, and estimated liabilities in the same range. Among the company’s creditors are SpaceX, Psionic LLC, Astrobotic Technology, NuSpace and Frontier Aerospace.

The filing follows months of losing key employees, including Sean Mahoney, chief executive, and Reuben Garcia, director of technical operations and manager of landing systems.

The company has also laid off 20 employees, including 15 engineers working on the XL-1 lander.

“Masten intends to use the Chapter 11 process to streamline its expenses, optimise its operations and conduct sale processes that maximise value for its unsecured creditors,” said Masten in a statement. “We expect the case to move quickly in order to minimise expenses.”

The company has also furloughed the remainder of its staff in the hope that they can be brought back if the company’s financial situation improves.

“We are hopeful that the Chapter 11 process will enable us to continue operations and deliver value for our customers and the space industry,” concluded Masten.

News: Space company Masten files for bankruptcy after struggle with NASA moon contract

Voyager Digital files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Amid considerable difficulty within the cryptocurrency market, Voyager Digital, a cryptocurrency broker, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court of the Southern District of New York.

Last week, Voyager, which is based in New Jersey, suspended all withdrawals and trading and said “volatility and contagion” in the crypto markets had forced it into a Chapter 11 filing.

The wider cryptocurrency market has experienced a significant slump of late. Today, the industry which was valued at $3 trillion at its peak last November, is now valued at less than $1 trillion, with the decline accelerating in May when a multibillion-dollar cryptocurrency, Terra, collapsed.

In its Chapter 11 bankruptcy filing on Tuesday, Voyager estimated that it had more than 100,000 creditors and somewhere between $1bn and $10bn in assets and liabilities. Alameda Research – a cryptocurrency trader – was Voyager’s largest single creditor, with unsecured loans of $75m. Alameda holds a stake of over 9 percent in Voyager.

“This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers,” said Stephen Ehrlich, chief executive of Voyager. “Voyager’s platform was built to empower investors by providing access to crypto asset trading with simplicity, speed, liquidity, and transparency. While I strongly believe in this future, the prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital (‘3AC’) on a loan from the Company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now. The chapter 11 process provides an efficient and equitable mechanism to maximize recovery.”

Last week, Voyager said it had issued a notice of default to Singapore-based crypto hedge fund 3AC for failing to make payments on a crypto loan totalling over $650m. 3AC filed for Chapter 15 bankruptcy in a federal bankruptcy court in the Southern District of New York last Friday, in hopes of shielding its US assets after a court in the British Virgin Islands reportedly ordered the firm into liquidation.

According to the statement announcing Voyager’s filing, the company’s reorganisation plan, upon implementation, would resume account access and return value to customers. Under the terms of the plan, which is subject to change given ongoing discussions with other parties, and requires Court approval, customers with crypto in their accounts will receive in exchange a combination of the crypto in their accounts, proceeds from the 3AC recovery, common shares in the newly reorganised company, and Voyager tokens. The plan contemplates an opportunity for customers to elect the proportion of common equity and crypto they will receive, subject to certain maximum thresholds.

News: Crypto lender Voyager Digital files for bankruptcy

Makeup giant Revlon files for Chapter 11

BY Fraser Tennant

Weighed down by debt load, pandemic-related disruptions to its supply chain network and escalating costs, cosmetic maker Revlon, along with certain of its subsidiaries, has filed for Chapter 11 bankruptcy protection.

The company has also experienced stiffer competition as well as struggling to keep pace with changing beauty tastes.

The Chapter 11 filing is intended to allow Revlon to strategically reorganise its legacy capital structure and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, as well as obligations to its lenders.

Upon receipt of court approval, the company expects to receive $575m in debtor-in-possession (DIP) financing from its existing lender base, which in addition to its existing working capital facility, will provide liquidity to support day-to-day operations.

In addition, Revlon has said strong support by its lenders will help the business manage through current macroeconomic challenges and, in turn, enable it to better serve customers.

“Today’s filing will allow Revlon to continue to offer the iconic products we have delivered for decades, while providing a clearer path for our future growth,” said Debra Perelman, president and chief executive of Revlon. “Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position.”

According to the filing, Revlon has assets and liabilities between $1bn and $10bn. None of Revlon’s international operating subsidiaries are included in the US Chapter 11 proceedings, except Canada and the UK.

“Our challenging capital structure has limited our ability to navigate macroeconomic issues in order to meet this demand,” added Ms Perelman. “By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognised brands.”

Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high quality product innovation, performance and sophisticated glamour. Today, Revlon’s diversified portfolio of brands is sold in approximately 150 countries around the world.

Ms Perelman concluded: “We are committed to ensuring the reorganisation is as seamless as possible for our key stakeholders, including our employees, customers and vendors, and we appreciate their support during this process.”

News: Revlon files for bankruptcy, blames supply chain snags

Embattled TPC Group files for Chapter 11

BY Fraser Tennant

In a move designed to position itself for future growth opportunities, chemical and petroleum-based products provider TPC Group Inc. and certain of its subsidiaries have voluntarily filed for Chapter 11 bankruptcy protection.

In connection with the Chapter 11 filing, the company has entered into a restructuring support agreement (RSA) to implement a financial restructuring with the support of a majority of its secured noteholders that will deleverage and recapitalise its balance sheet and definitively address other legacy liabilities.

The RSA locks in the support of supporting noteholders and sponsors and establishes the framework for the company’s restructuring, which, upon emergence, is expected to resolve all tort liabilities arising from the Port Neches facility incident and eliminate from the company’s balance sheet over $950m of the company’s approximately $1.3bn of secured funded debt.

“A series of unprecedented events including the coronavirus (COVID-19) pandemic, supply chain issues, commodity price increases, higher energy costs and operational challenges resulting from 2021 Winter Storm Uri, as well as the explosion at our Port Neches plant in November of 2019 have caused financial strain for the company,” said Edward J. Dineen, chairman, president and chief executive of TPC Group. “However, we have undertaken many efforts to address the impacts of these events and preserve liquidity, which has given us the necessary time to consider the best path forward for our business and our stakeholders.”

The transactions contemplated by the RSA, once consummated, will result in the TPC Group emerging from bankruptcy with a significantly enhanced liquidity profile by providing for capital infusions in the form of: (i) $450m in connection with two rights offerings and $350m in exit notes; (ii) a $323m delayed draw debtor-in-possession (DIP) financing facility; and (iii) a $200m asset-based revolving DIP facility.

Headquartered in Houston, TPC Group is a leading producer of value-added products derived from petrochemical raw materials such as C4 hydrocarbons, and provider of critical infrastructure and logistics services along the Gulf Coast.

The company expects to continue its operations uninterrupted throughout the Chapter 11 process.

Mr Dineen concluded: “We are confident the Chapter 11 process will bolster our liquidity, substantially improve our debt position, and definitively resolve the liabilities associated with the Port Neches facility incident.”

News: Chemical maker TPC Group files pre-arranged bankruptcy