A decline has taken place in Sundance Energy Inc. (NASDAQ: SNDE) stock in premarket session today. The stock has moved down by -42.55% whereas it closed the last session at $2.35, adding +7.31%. The stock has declined following a bankruptcy petition filing.
Yesterday, a bankruptcy filing was filed by Sundance and its affiliates in the U.S. Bankruptcy Court for the Southern District of Texas, announced the company today. The petition was filed in order to strengthen Sundance Financial balance sheet and maximize its chances of sustained success in the future.
The Chapter 11 process should be complete in approximately 60 days, with all operations expected to be carried out on a day-to-day basis without interruption. On March 9, 2021, Sundance entered into a Restructuring Support Agreement (the “RSA”) with the administrative agents and 100% holders of its prepetition facilities including revolving credit as well as term loan.
A prepackaged plan of reorganization (Prepackaged Plan) for the Company was agreed to by the parties under Chapter 11 of the U.S. Bankruptcy Code. The Prepackaged Plan will enable the Company to obtain over $250 million in funded debt from its balance sheet through debt-for-equity exchange. Sundance’s financial structure will be strengthened by implementing the Prepackaged Plan.
The company will also be able to concentrate on core competencies without being burdened by large debt levels. Through the support of its lenders, the Company can accelerate the recapitalization of its balance sheet through the implementation of the Prepackaged Plan. It will also assist the company in reorganizing as a private entity while minimizing any negative effects on the company’s creditors.
After getting approved itself by the Bankruptcy Court and consummation, the Prepackaged Plan would constitute a complete divestiture of existing equity interests on the effective date. No compensation of any kind is expected to be paid to holders of existing equity interests.