NEW YORK (Reuters) – Chesapeake Energy Corp (CHK.N) filed for Chapter 11 on Sunday, becoming the largest oil and gas producer in the United States to seek bankruptcy protection in recent years as it bowed to heavy debts and the impact of the Coronavirus epidemic in the energy markets.
Oklahoma City-based shale pioneer, co-founded by the late Aubrey McClendon, has filed Chapter 11 files with the US bankruptcy court in the South Texas district, according to a company statement.
“Chesapeake intends to use the procedure to strengthen its balance sheet and restructure its inherited contractual obligations in order to achieve a more sustainable capital structure,” the statement said, adding that its operations would continue during the process.
As part of the restructuring plan, Chesapeake will aim to eliminate approximately $ 7 billion of its debt. The company has entered into a restructuring support agreement, which has the full support of lenders to its main revolving credit facility as well as varying degrees of support from other categories of creditors.
As part of the agreement, Chesapeake has obtained $ 925 million in debtor in possession (DIP) financing to help support its operations during the bankruptcy proceedings.
Chesapeake has also agreed to the main terms of a $ 2.5 billion exit financing, while some of its lenders and guaranteed note holders have agreed to support a $ 600 million offer of new shares to take place. at the end of the chapter 11 process, adds the press release.
Report by David French in New York and Rama Venkat in Bengaluru; edited by Diane Craft
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