The Court approvals immediately improved Aegean's liquidity position, and ensured that suppliers, vendors, and employees, among other critical partners, continued to be paid in the normal course of business, the company said.
However, bondholders are reportedly objecting to a $532 mill debtor-in-possession (DIP) loan from Mercuria Energy Group that could give the Swiss commodities trader a controlling stake in the company and push their recoveries into cents on the dollar territory, Reuters said.
Through the Court approvals, Aegean has access to substantial capital during the restructuring process provided by the DIP credit facility, including an initial $40 mill of incremental cash over the next 30 days to support operations.
"The company continues to operate in the normal-course and all payments to suppliers and vendors have been made and will continue to be made during the relatively short anticipated duration of the Chapter 11 process,” said Donald Moore, Aegean Board chairman. "The Court's approval of our First Day motions is an important step forward in the restructuring process and enables access to incremental liquidity enabling the company to continue to provide customers high quality service across our global network.”
Aegean and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code on 6th November, 2018, with the support of Mercuria, one of the world’s largest independent energy and commodity companies.
In addition to providing the DIP to fund the Chapter 11 process and the company’s working capital needs, Mercuria is also acting as the ‘stalking horse’ bidder in a sale process designed to maximise the value of the company as a going concern.
The asset purchase agreement, including the $681 mill ‘stalking horse’ bid proposed by Mercuria, has been filed with the Court.
In connection with its restructuring efforts, Kirkland & Ellis is acting as legal counsel to Aegean, Moelis & Company is acting as investment banker to Aegean, and EY Turnaround Management Services is acting as restructuring advisor to Aegean.
The final DIP hearing is due to take place on 5th December.