Aegean entered this process with the support of Mercuria Energy Group, a key strategic partner and one of the world’s largest independent energy and commodity companies.
Mercuria had agreed to provide more than $532 mill in post petition financing to fund the chapter 11 process and the company’s working capital needs. It has also agreed to serve as the stalking horse bidder in a sale process designed to optimise the value of the company as a going concern.
Aegean said that it continued to explore value-maximising alternatives.
The debtors have filed a motion with the bankruptcy court seeking to jointly administer all of the debtors’ Chapter 11 cases under the caption ‘In re Aegean Marine Petroleum Network Inc, et al’.
They will continue to operate their businesses as ‘debtors-in-possession’ under the jurisdiction of the bankruptcy court and in accordance with the applicable provisions of the US Bankruptcy Code and orders of the bankruptcy court, Aegean said.
Aegean has filed a series of first day motions with the bankruptcy court seeking authorisation to continue to conduct business normally, including in relation to employees, customers and suppliers, among others. The company is also seeking approval of the Mercuria-led post petition financing.
This financing is designed to ensure the company has adequate working capital to fund the business and continue ordinary course operations during the Chapter 11 cases and to fund the sale process.
In connection with its restructuring efforts, Kirkland & Ellis is acting as legal counsel, Moelis & Company is acting as investment banker, and EY Turnaround Management Services is acting as restructuring advisor to Aegean.
On 2nd November, Aegean announced the results of an investigation into certain accounting-related matters by the company’s board audit committee, as well as the its decision to restate certain historical financial statements, as a result of the findings of the investigation.
Aegean previously reported on June 4, 2018, that, as a result of preliminary findings, the audit committee believed that around $200 mill of accounts receivable on the company’s books and records at 31st December, 2017 would need to be written off.
The investigation is substantially complete and, based on the findings to date, Aegean has concluded that up to $300 mill of company cash and other assets were misappropriated through fraudulent activities.
Aegean’s audit committee believed that the principal beneficiary of the misappropriation is OilTank Engineering & Consulting, a company based in Fujairah and incorporated on 15th March, 2010 in the Marshall Islands.
On 31st March, 2010 OilTank entered into a contract with Aegean’s subsidiary to oversee the construction of the Fujairah oil terminal facility. It was believed that this contract was used to misappropriate company funds through inflated contracts and fraudulent pricing. Aegean said that it had reason to believe that OilTank is controlled by a former affiliate of the company.
The investigation also uncovered additional actions to defraud the company and/or its subsidiaries, including prepayment for future oil deliveries that were never made. These fraudulent activities appear to have commenced as early as 2010.
Aegean voluntarily reported its preliminary findings to the US Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ) and has now reported the results of the audit committee investigation.
On 3rd October, 2018 Aegean received a grand jury subpoena from the US Attorney's Office for the Southern District of New York in connection with suspected felonies.