On March 27, 2016, Southcross Holdings LP and certain of its affiliates (collectively, “Southcross” or the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division. According to the declaration of Southcross’s restructuring advisor, Jeffery J. Stegenga, (the “Stegenga Declaration”), Southcross has filed a pre-packaged plan of reorganization, (the “Plan”) which has received unanimous support. The Plan will eliminate $700 million in debt in exchange for equity in the reorganized Debtors and receive a significant infusion of new capital. See Stegenga Declaration at 4.
The Debtors’ operations have focused on the midstream oil and gas sector providing services including natural gas gathering, processing, treating, compression, and transportation services, as well as natural gas liquid fractionation and transportation services. Debtors own and operate approximately 4,000 miles of pipelines, two sour gas treating facilities, three processing facilities, two fractionating facilities, and one facility with both processing and fractionating capabilities. The Debtors also own 60 and 100 percent interest respectively in two non-Debtor affiliates: Southcross Energy Partners, L.P. and Southcross Energy Partners GP, LLC. See Stegenga Declaration at 5.
Southcross’s liabilities total approximately $826 million in funded debt and preferred equity obligations which includes (i) $50 million owed pursuant to a 2014 revolving Credit Agreement with UBS AG, Stamford Branch as Administrative Agent, (ii) $566 million owed on account of a senior secured term loan facility under the amended Credit Agreement, (iii) $210 million in preferred equity plus accrued distributions. See Stegenga Declaration at 36.
The Debtors’ bankruptcy cases are being jointly administered in the bankruptcy case captioned In re Southcross Holdings LP, et al., Case No. 16-20111.
A copy of the Stegenga Declaration can be accessed here: Download Stegenga Declaration.
For further information, please contact a Thompson & Knight Bankruptcy and Restructuring Attorney.
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