Arsenal Resources Development LLC, a natural gas operator in the Appalachian Basin, and certain of its affiliates will implement a pre-packaged plan of reorganization as part of its Chapter 11 bankruptcy. ARD will pursue a recapitalization transaction that includes a $100 million new equity investment made by certain funds affiliated with Chambers Energy Capital as well as by Mercuria Energy Co., two of the company’s most significant lenders, and a substantial deleveraging of ARD’s balance sheet.
The plan has the full support of the ARD’s existing lenders and an overwhelming majority of the company’s equity holders. The recapitalized company will be majority-owned by certain funds affiliated with Chambers Energy Capital as well as by Mercuria Energy Co. (or one of its affiliates).
In addition to the foregoing $100 million equity investment, syndicated lenders to ARD have agreed to equitize more than $360 million of long-term debt. Upon completion of the transaction, the recapitalized company is projected to have a new $130 million RBL facility, and no other funded debt.
Importantly, the plan ensures that the employees, customers and vendors of ARD’s operating subsidiaries will be paid in full in the ordinary course of business.
The company is an independent exploration and production company headquartered in Pittsburgh, that is engaged in the acquisition, exploration, development and production of natural gas in the Appalachian Basin.
ARD is represented by Simpson Thacher & Bartlett LLP and Young Conaway Stargatt & Taylor LLP, as legal counsel, PJT Partners LP, as investment banker and Alvarez & Marsal North America LLC, as restructuring adviser.
