The headline Axip Files for Chapter 11 sent a jolt through the energy services sector Sunday as Axip Energy Services sought bankruptcy protection in Texas, unveiling a plan to sell its assets in the shadow of $240.5 million in funded debt.
In court filings, the natural gas compression equipment provider said it has lined up a $161 million baseline bid from competitor Service Compression, along with $25.5 million in fresh financing to power the Chapter 11 process.
“This marks a strategic step to position Axip for long-term success under new ownership,” Chief Restructuring Officer Ben Chesters said in a statement released Sunday.
A Heavy Debt Stack and a Lifeline Bid
According to its petition, Houston-based Axip’s funded debt includes a $13.2 million superpriority facility, a $207.8 million asset-based lending facility and a $19.5 million second-lien facility. The company also reported between $17 million and $20 million in trade claims.
To keep operations running during the restructuring, Axip said its asset-based lenders agreed to provide debtor-in-possession financing composed of $25.5 million in new money and a $66.2 million rollup of existing asset-based debt.
The company is asking the court to designate Service Compression’s $161 million cash offer as a stalking horse bid. An auction is slated for April 1 if higher or better offers surface before then.
