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Knight Energy Holdings and Affiliates Enter into Restructuring Support Agreement in Conjunction with Financial Restructuring

By: - Date: 08/09/2017

Plan Supported by Secured Lenders Will Reduce Debt by More Than $175 Million and Provide for Significant New Capital to Bolster Liquidity

LAFAYETTE, La.--(BUSINESS WIRE)--Knight Energy Holdings, LLC (“Knight” or the “Company”) and its operating affiliates announced today that they have signed a Restructuring Support Agreement (“RSA”) with certain debt holders representing over 87% of the Company’s Senior Secured Credit Facility due 2018 in conjunction with its voluntary filing of a pre-negotiated Chapter 11 petition today in the U.S. Bankruptcy Court for the Western District of Louisiana, Lafayette Division (“Court”). The Company intends to move expeditiously to present its plan of reorganization to the Court and seek confirmation of the same. The RSA provides for a substantial deleveraging transaction pursuant to which Knight will meaningfully improve its balance sheet by equitizing over $175 million of its existing secured obligations and will substantially bolster its liquidity position through an exit financing facility.

Knight is one of the largest, privately-owned oilfield rental tool companies in the world. It supplies a wide offering of rental equipment and services for drilling, completion and well control activities – serving a diverse base of oil and natural gas E&P operators. The Company was founded in 1972 by Eddy Knight, and is owned today by second-generation family members.

The Knight family remarked: “Like many leading oil and gas companies, we have been affected by the ongoing downturn in the market. The Company has spent considerable time since then focusing on how to best serve our customers, employees, and to maintain strong relations with our vendors and employees. In order to best position our Company for the future, we felt that a financial restructuring was necessary and worked with our stakeholders to achieve a consensual plan to deleverage the Company and position Knight and our employees for success. Together we have developed a long term strategic plan that will allow Knight to continue to be a market leader.”

The Company will continue to operate in the ordinary course of business during the proceeding and has filed various “first day” motions seeking approval of relief so as to operate with minimal impact or interruption to Knight’s valued employees, customers, vendors and other important parties. Knight intends to continue to pay employee wages, salaries and benefits and will work to ensure that all customer programs will remain unchanged. The Company is also seeking approval of a $14.5 million DIP financing facility. The “first day” motions are scheduled to be heard by the Bankruptcy Court on the afternoon of Wednesday, August 9, 2017. The Company anticipates the relief requested being granted. As such, Knight will have ample liquidity to support the business during the Chapter 11 proceeding.

Heller Draper is acting as lead restructuring counsel, a representative from Opportune is serving as the Company’s Chief Restructuring Officer, and Farlie Turner has served as the Company’s financial advisor.

ABOUT KNIGHT OIL TOOLS

The Company originated as Knight Specialties in Morgan City, Louisiana, out of the trunk of founder Eddy Knight’s car. Through organic growth and acquisitions, the Company’s chief operating affiliate became Knight Oil Tools in 1984. Since then, Knight Oil Tools has evolved into a company that provides complete rental, fishing, manufacturing packages, drilling jars, inspection, hardbanding and safety training to the oil and gas industry in selected markets throughout the U.S. Knight Oil Tools’ long term vision is to continue to build upon its strong commitment to provide quality equipment and outstanding service to customers in each product line it serves.

Contacts
Knight Oil Tools
Jeff Elmore, President, +1 337-233-0464
jelmore@knightoiltools.com


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