Nine Energy Service Pursues Strategic Restructuring
Nine Energy Service, Inc. is embarking on an important journey to enhance its capital structure and pave the way for future growth. The company has announced that it has gained strong support from its lenders to approve a voluntary prepackaged restructuring plan. This proactive measure aims to position the company for long-term success and is expected to be finalized within a brief timeframe.
Financial Commitment and Operational Continuity
As part of this restructuring initiative, Nine Energy Service has secured a commitment for $125 million in new financing. This support is crucial for maintaining ongoing operations during the restructuring process, ensuring that the company can continue to deliver exceptional services to its clients. Throughout this transition, Nine will operate as usual, maintaining its commitment to providing best-in-class solutions to its customers.
Elimination of Debt and Interest Savings
The restructuring plan is set to reduce Nine Energy Service's financial burden significantly. The company anticipates eliminating around $320 million in senior secured notes, which will decrease its annual interest expense by approximately $40 million. This strategic move will set the stage for a healthier balance sheet, enabling Nine to focus on delivering innovative well solutions without interruption during the restructuring proceedings.
Leadership Statement
Ann Fox, President and CEO of Nine Energy Service, expressed confidence in this strategic decision. "Since our inception, we have consistently met the evolving challenges in the oil and gas industry. Today, we are taking crucial steps to position our business for sustained success. This agreement will allow us to stay focused on providing our teams with the resources they need to support our customers efficiently and safely," stated Fox. She also extended her gratitude to the Nine team, emphasizing their resilience and dedication throughout this process.
Restructuring Process and Vendor Relations
In anticipation of the chapter 11 filings, Nine Energy Service has been soliciting votes on its restructuring plan and aims to emerge from the process within approximately 45 days. To facilitate ongoing operations, the company has filed several customary motions with the court, allowing it to continue paying employees and providing uninterrupted benefits. Additionally, Nine plans to honor all trade obligations, ensuring that vendors are paid in full for all goods and services rendered both before and after the restructuring filing.
About Nine Energy Service
Nine Energy Service is recognized as a leading provider of oilfield services, specializing in advanced solutions for unconventional oil and gas resource extraction. With a culture deeply rooted in performance and innovative technologies, Nine is dedicated to developing smarter applications that enhance efficiency and reduce emissions for its customers. The company prides itself on its operational reach across all major onshore basins in North America.
Leadership and Advisory Support
Nine Energy Service is being advised by a team of legal and financial experts to navigate this restructuring process effectively. Legal counsel is being provided by Kirkland & Ellis LLP and Kane Russell Coleman Logan PC, while Moelis & Company acts as the investment banker, and FTI Consulting offers financial and communications advisory support.
Frequently Asked Questions
What is the main goal of Nine Energy Service's restructuring?
The main goal of the restructuring is to strengthen Nine's capital structure and ensure long-term financial health for the future growth of the company.
How much financing has Nine secured during this restructuring?
Nine Energy Service has secured a commitment for $125 million in new financing to support operations throughout the restructuring process.
What impact will the restructuring have on Nine's customers and vendors?
The company continues operations as usual and assures customers that all vendors will be paid in full, ensuring no disruption in services or relationships.
How long does Nine expect to be in the restructuring process?
The company anticipates emerging from the restructuring process within approximately 45 days.
What services does Nine Energy Service provide?
Nine is a leading oilfield services provider specializing in innovative solutions for unconventional oil and gas extraction and development.
