Printer Friendly

EDISTO ANNOUNCES PRELIMINARY AGREEMENTS WITH PRINCIPAL BANK LENDER AND HOLDERS OF SENIOR NOTE ON TERMS OF PROPOSED FINANCIAL RESTRUCTURING

EDISTO ANNOUNCES PRELIMINARY AGREEMENTS WITH PRINCIPAL BANK LENDER AND HOLDERS OF SENIOR NOTE ON TERMS OF PROPOSED FINANCIAL RESTRUCTURING
 DALLAS, Oct. 13 /PRNewswire/ -- Edisto Resources Corporation (AMEX: EDS) today announced preliminary agreements with its principal bank lender and certain large holders of the 13-7/8 percent senior notes due 1999 of Edisto's subsidiary, NRM Energy Company, L.P. (AMEX: NRMC), in connection with Edisto's proposed financial restructuring.
 Certain noteholders, who have informed Edisto that they collectively own more than 80 percent of the outstanding notes, have entered into a preliminary agreement with Edisto pursuant to which the noteholders have agreed to support a plan of reorganization. The plan will be accomplished through a pre-negotiated Chapter 11 bankruptcy filing that will enable Edisto to achieve certain advantages not present in a voluntary exchange offer, and will contain the following principal elements:
 -- Edisto will exchange shares of common stock representing, in the aggregate, 90 percent of the shares to be outstanding upon confirmation of the plan for all principal and accrued interest claims of holders of the Notes (currently approximately $110 million); and
 -- current holders of common stock will retain their shares (representing 10 percent of the shares to be outstanding upon confirmation of the plan), and will additionally receive warrants entitling them to acquire shares of common stock that, if fully exercised, would result in existing holders owning 22 percent of the outstanding shares of common stock (the warrants will have a three-year term and an exercise price of approximately $0.47 per share (pre- split)). Edisto expects to effect a reverse stock split in connection with the restructuring.
 Edisto has also received a commitment from its principal bank lender to provide financing upon confirmation of the plan in an amount sufficient to refinance all bank debt of Edisto and its oil and gas subsidiaries (currently approximately $35 million). The commitment provides for amortization of such debt over a 29-month period in monthly installments.
 James R. McNab Jr., chairman of the board and chief executive officer of Edisto, stated, "We are pleased that Edisto's major noteholders and bank are supporting both our reorganization plan and our longer-term plans for the company. The successful culmination of the reorganization will enable us to return our efforts to strengthening the company's reserve base and expanding the operations of its gas marketing and pipeline subsidiaries. The inclusion of three-year warrants in the plan will enable our existing shareholders to retain upside potential in a company that will emerge with debt related to its exploration and production operations reduced by more than 80 percent from 1991 levels. With gas prices up sharply, our Missouri pipeline project now completed, and a 1993 business plan that allows for $20-30 million of capital expenditures, Edisto should emerge from this restructuring with the capability to expand all facets of our business."
 It is expected that the pre-negotiated plan of reorganization will provide that all other creditors of Edisto will be unimpaired, paid in the ordinary course of business, or otherwise have their claims satisfied in full. Consent of the Edisto shareholders to the plan will be sought subsequent to the bankruptcy filing and Edisto's registration statement relating to the restructuring currently on file with the Securities and Exchange Commission will be withdrawn. As previously announced, the bankruptcy filing (which Edisto expects to make in late October) will include only Edisto and its domestic exploration and production subsidiaries, primarily NRM Energy and Edisto Exploration & Production Company. The filing will not include Edisto's gas marketing and transmission subsidiaries, ESCO Energy, Inc., Vesta Energy Company and Omega Pipeline Company, its international oil and gas operations or its 80 percent-owned subsidiary, Multiflex International, Inc.
 The preliminary agreements are subject to numerous conditions and are generally terminable by the bank or any of the large noteholders upon five days' written notice to Edisto. The pre-negotiated plan of reorganization will also require the approval of the bankruptcy court. As such, no assurance can be given by Edisto that the plan will be submitted or that the terms of a plan of reorganization ultimately approved will not differ materially from those outlined above. Until terminated, the agreements effectively prevent the bank or large noteholders from taking any action as a result of previously announced defaults by Edisto and its oil and gas subsidiaries under the bank credit agreement and note indenture.
 Edisto Resources Corporation's consolidated activities include the production of oil and gas, the exploration and development of oil and gas reserves and natural gas marketing and transportation.
 -0- 10/13/92
 /CONTACT: Gary L. Pittman, VP-financial services of Edisto Resources Corporation, 214-880-0243/
 (EDS) CO: Edisto Resources Corporation ST: Texas IN: OIL SU: FNC


CK -- NY047 -- 9332 10/13/92 12:37 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 13, 1992
Words:786
Previous Article:STEWART & STEVENSON ANNOUNCES THREE ORDERS
Next Article:McDONALD'S ANNOUNCES 67TH CONSECUTIVE QUARTERLY CASH DIVIDEND ON COMMON STOCK
Topics:


Related Articles
EDISTO RESOURCES ANNOUNCES RESTRUCTURING INCLUDING EXCHANGE OFFER FOR 13-7/8 PERCENT SENIOR NOTES DUE 1999 OF NRM ENERGY
EDISTO ANNOUNCES STATUS OF RESTRUCTURING EFFORT
EDISTO ANNOUNCES TENTATIVE SETTLEMENT OF LAWSUIT AND PARTIAL REDEMPTION OF PREFERRED STOCK
EDISTO ANNOUNCES DECISION NOT TO MAKE INTEREST PAYMENT ON 13-7/8 PERCENT SENIOR NOTES OF ITS NRM ENERGY SUBSIDIARY
EDISTO REPORTS STANDSTILL AGREEMENTS WITH CREDITORS AND STATUS OF PROPOSED FINANCIAL RESTRUCTURING
EDISTO ANNOUNCES FILING OF CHAPTER 11 PETITIONS AND PLAN OF REORGANIZATION
GREAT AMERICAN COMMUNICATIONS COMPANY ANNOUNCES PROPOSED TERMS OF RESTRUCTURING
EDISTO ANNOUNCES APPROVAL OF DISCLOSURE STATEMENT AND SETTING OF CONFIRMATION HEARING DATE BY BANKRUPTCY COURT
EDISTO RESOURCES ANNOUNCES FILING OF FINAL VOTING RESULTS ON PLAN OF REORGANIZATION
DELAWARE BANKRUPTCY COURT CONFIRMS EDISTO RESOURCES CORPORATION'S PLAN OF REORGANIZATION

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters