Altera Starts Chapter 11 Process To Ease Debt Restructuring

Altera Starts Chapter 11 Process To Ease Debt Restructuring
Altera Infrastructure started the Chapter 11 process in the US Bankruptcy Court for the Southern District of Texas to help the balance-sheet restructuring.

Altera Infrastructure has executed a Restructuring Support Agreement with approximately 71 percent of Altera’s funded debt obligations, which includes Brookfield and a super-majority of its bank lenders. To implement the balance-sheet restructuring, Altera has commenced a Chapter 11 process in the United States Bankruptcy Court for the Southern District of Texas.

All in all, the RSA has been signed or agreed to in principle by holders of 80 percent of its funded debt obligations, which includes approximately 91 percent of its bank lenders pending certain creditors’ internal credit approval processes.

The terms of the RSA establish the framework for a consensual and comprehensive financial restructuring that will deleverage Altera’s balance sheet and best position Altera for long-term growth and success.

The RSA contemplates, among other things, addressing more than $1 billion of secured and unsecured holding company debt, $400 million of preferred equity, and $550 million of secured asset-level bank debt (including unsecured guarantees of such debt issued by Altera Infrastructure), a comprehensive reprofiling of Altera’s bank loan facilities to align cash flow with debt service obligations better, and the continued support of Altera’s equity sponsor, Brookfield.

In addition, Altera has obtained a commitment from Brookfield for a $50 million debtor in possession financing to help fund Altera’s restructuring process and ensure ordinary course operations remain unimpaired during the Chapter 11 process.

Altera has filed a series of motions in conjunction with the petitions, which, once approved by the Court, will enable the company to operate its business in the ordinary course without interruption. These motions will also allow Altera to continue to honor obligations to its employees, customers, and suppliers on previously agreed-upon schedules and terms on an uninterrupted basis.

“We enter into this phase of our balance-sheet restructuring with the support of the majority of Altera’s secured lenders and equity sponsor Brookfield. We are confident that this Chapter 11 process will result in a comprehensive recapitalization transaction that will not only stabilize liquidity but also deleverage our balance sheet and better position Altera for future growth,” said Ingvild Sæther, Chief Executive Officer of Altera Infrastructure Group.

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