Oilfield services provider Nine Energy Services sought refuge in bankruptcy court Monday, announcing it has filed for Chapter 11 protection in Texas with a prepackaged restructuring plan designed to erase $320 million of its $388 million debt load through an equity swap.
The filing marks a dramatic turn for the Houston-based company, which once rode the surge of U.S. shale expansion but now seeks to steady itself after years of market turbulence.
Prepack Plan Backed by Major Creditors
In court papers, Nine Energy said it secured support from holders of approximately 70% of its senior notes for the restructuring agreement. The plan calls for converting a substantial portion of its debt into equity, a financial reset aimed at shoring up its balance sheet.
The company’s revolving loan provider has agreed to supply $125 million in Chapter 11 financing. That debtor-in-possession funding is slated to roll into a $135 million exit facility upon the company’s emergence from bankruptcy.
Chief Executive Ann Fox signaled confidence in the restructuring strategy.
“We look forward to emerging from this process with a healthier financial foundation, well-positioned to offer comprehensive well solutions for many years to come,” Fox said in a statement issued Monday.
