Item 7.01 Regulation FD Disclosure.
As previously disclosed, on October 3, 2019, EP Energy Corporation (the
"Company"), and certain of its direct and indirect subsidiaries (collectively
with the Company, the "Debtors") filed voluntary petitions (the "Chapter 11
Cases") in the United States Bankruptcy Court for the Southern District of Texas
(the "Bankruptcy Court") seeking relief under chapter 11 of title 11 of the
United States Code (the "Bankruptcy Code"). The Chapter 11 Cases are being
jointly administered under the caption "In re: EP Energy Corporation, et al.,
Case No. 19-35654." Court filings and other information related to the Chapter
11 Cases are available at the website administered by the claims agent, Prime
Clerk, at https://cases.primeclerk.com/EPEnergy.
As previously disclosed in a Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "SEC") on October 21, 2019, on
October 18, 2019, the Debtors entered into a Plan Support Agreement (the "PSA")
with holders of approximately 52.0% of the 8.000% Senior Secured Notes due 2024
and approximately 79.3% of the 9.375% Senior Secured Notes due 2024 and 8.000%
Senior Secured Notes due 2025 issued, in each case, by EP Energy LLC and Everest
Acquisition Finance Inc., including affiliates of, or funds managed by, Elliott
Management Corporation ("Elliott"), Apollo Global Management, Inc. ("Apollo"
together with Elliott, the "Initial Supporting Noteholders"), Access
Industries, Inc. ("Access"), and Avenue Capital Group (collectively, with the
Initial Supporting Noteholders and Access, the "Supporting Noteholders"), to
support a restructuring on the terms of a chapter 11 plan described therein.
Pursuant to the PSA, the chapter 11 plan is premised on, among other things,
(i) an equity rights offering (the "Rights Offering"), and (ii) an approximately
$629 million exit facility which the Prepetition RBL Facility and proposed
Senior Secured Superpriority Debtor-in-Possession Facility will "roll" into on
the effective date of the chapter 11 plan.
As previously disclosed in a Current Report on Form 8-K filed with the SEC on
October 21, 2019, on October 18, 2019, the Debtors also entered into a backstop
commitment agreement (the "BCA") with the Supporting Noteholders, pursuant to
which the Supporting Noteholders agreed to backstop $463 million of the Rights
Offering.
On November 18, 2019, the Debtors filed a proposed Joint Chapter 11 Plan (the
"Plan") and a proposed Disclosure Statement for Joint Chapter 11 Plan of
Reorganization (the "Disclosure Statement") describing the Plan and the
solicitation of votes to approve the same from certain of the Debtors' creditors
with respect to the Chapter 11 Cases. The Bankruptcy Court hearing on the
Debtors' motion filed on November 18, 2019 for entry of an order (i) approving
the Disclosure Statement; (ii) establishing solicitation and voting procedures;
(iii) establishing Rights Offering procedures; (iv) scheduling a hearing to
consider confirmation of the Plan; (v) establishing notice and objection
procedures for confirmation of the Plan; and (vi) approving notice and objection
procedures for the assumption of executory contracts and unexpired leases is
scheduled for January 6, 2020, at 2:00 p.m. Central Time.
Information contained in the Plan and the Disclosure Statement is subject to
change, whether as a result of amendments or supplements to the Plan or
Disclosure Statement, third-party actions, or otherwise, and should not be
relied upon by any party. Copies of the Plan and the Disclosure Statement are
attached hereto as Exhibits 99.1 and 99.2, respectively.
This Current Report on Form 8-K is not a solicitation to accept or reject the
proposed Plan. Any such solicitation will be made pursuant to and in accordance
with the Disclosure Statement, as may be
2
--------------------------------------------------------------------------------
amended from time to time, and applicable law, including orders of the
Bankruptcy Court.
In accordance with General Instruction B.2 of Form 8-K, the information being
furnished under this Item 7.01 pursuant to this Current Report on Form 8-K,
including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities of that section, nor
shall it be deemed incorporated by reference into any registration statement or
other document filed by the Company under the Securities Act of 1933, as amended
(the "Securities Act"), or the Exchange Act, except as expressly set forth by
specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K includes certain forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act. Such statements are subject to risks and uncertainties that could
cause results to differ materially from the Company's expectations, including
the following: risks and uncertainties relating to the Chapter 11 Cases,
including but not limited to, the Company's ability to obtain Bankruptcy Court
approval with respect to motions in the Chapter 11 Cases, the effects of the
Chapter 11 Cases on the Company and on the interests of various constituents,
Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the Chapter
11 Cases in general, the length of time the Company will operate under the
Chapter 11 Cases, risks associated with third-party motions in the Chapter 11
Cases, the potential adverse effects of the Chapter 11 Cases on the Company's
liquidity or results of operations; the Company's ability to complete definitive
documentation in connection with any financing and the amount, terms and
conditions of any such financing; the ability of the Company to comply with the
terms of the PSA and/or the BCA; the ability of the Company to obtain requisite
support for the Plan from various stakeholders; the ability of the Company to
confirm and consummate the Plan in accordance with the terms of the PSA; the
uncertainty as to when or whether the effective date of the Plan will occur; the
effects of disruption from the Chapter 11 Cases making it more difficult to
maintain business and operational relationships, to retain key executives and to
maintain various licenses and approvals necessary for the Company to conduct its
business; the consequences of the acceleration of the Company's debt
obligations; risks related to the trading of the Company's securities on the OTC
Pink Market; as well as other risk factors set forth in the Company's Disclosure
Statement included as Exhibit 99.2 to this Current Report on Form 8-K, as may be
amended from time to time; as well as the risk factors described in the
Company's Annual Report on Form 10-K for the year ended December 31, 2018, as
updated in the Company's subsequently filed Quarterly Reports on Form 10-Q.
While the Company makes these statements in good faith, neither the Company nor
its management can guarantee that anticipated future results will be achieved.
The Company assumes no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking statements
made by the Company, whether as a result of new information, future events, or
otherwise. All forward-looking statements attributable to the Company or persons
acting on the Company's behalf are expressly qualified in their entirety by the
foregoing cautionary statements. All such statements speak only as of the date
made, and, except as required by law, the Company undertakes no obligation to
update or revise publicly any forward-looking statements, whether as a result of
new information, future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
See Exhibit Index
3
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses