ALICE, Texas, Jan. 23, 2017 (GLOBE NEWSWIRE) -- Forbes Energy Services Ltd. (OTC Pink: FESL) today announced that is has filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas-Corpus Christi Division on January 22, 2017 for itself and its principal subsidiaries pursuant to the terms of the previously disclosed Restructuring Support Agreement with certain holders of the Company’s 9% senior unsecured notes due 2019. The chapter 11 filing contemplates the reorganization of the Debtors pursuant to a prepackaged plan of reorganization (the “Plan”). In accordance with the RSA, Forbes completed solicitation of the holders of the Senior Unsecured Notes for acceptance of the Plan on January 18, 2017. Holders of 87.14% in principal amount of the outstanding Senior Unsecured voted to accept the Plan.

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 without impact or interruption to Forbes’ valued employees, customers, vendors and other important parties. To that end, Forbes intends to continue to pay employee salaries and benefits, vendors and trade creditors in full, and continue all customer programs as before. The “first day” motions are scheduled to be heard by the Bankruptcy Court on the morning of Wednesday, January 25, 2017. The Company anticipates the relief requested being granted.

Forbes has ample liquidity to support the business during the chapter 11 proceeding. Moreover, the Plan provides for a facility of $50 million to be funded by certain of the Company’s bondholders to ensure that Forbes has adequate working capital after the Plan goes effective.

Principal terms of the Plan, among others, are summarized below:

• The existing equity interests in the Company, including common and preferred stock, will be extinguished without recovery.
• Holders of allowed general unsecured claims, including ordinary course trade vendors, but excluding holders of the Senior Unsecured Notes, will be paid in full in the ordinary course of business or otherwise have their rights reinstated under the bankruptcy code.
• The Senior Unsecured Notes will be cancelled and each holder of the Senior Unsecured Notes will receive such holder’s pro rata share of (i) $20 million in cash, and (ii) 100% of the new common stock of the reorganized Company, subject to dilution on account of shares issued or available for issuance under a management incentive plan to be implemented under the Plan.
• Certain holders of the Senior Unsecured Notes will make available to the reorganized company a $50 million new first lien term loan facility, which will be backstopped by those certain holders of the Senior Unsecured Notes who executed that certain Backstop Agreement dated December 21, 2016 by and among the Company and such holders of the Senior Unsecured Notes.
• The Company’s loan and security agreement, dated as of September 9, 2011 and subsequently amended, with Regions Bank and the lenders party thereto will be terminated and a credit facility to be negotiated and entered into with Regions Bank on the effective date of the Plan will cover letters of credit and bank product obligations.

Bankruptcy Court filings, the Plan and other information related to the chapter 11 cases are available at a website administered by the Debtors’ claims agent, Kurtzman Carson Consultants, LLC, at http://www.kccllc.net/forbes.

Pachulski Stang Ziehl & Jones LLP is acting as legal restructuring counsel, Winstead PC is acting as corporate and securities counsel, and Alvarez & Marsal North America, LLC and Jefferies LLC are acting as financial advisors for the Company. Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal counsel and FTI Consulting is acting as financial advisor to the Supporting Noteholders.

About Forbes Energy
Forbes Energy is an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas and Pennsylvania. More information on the Company can be found by visiting www.forbesenergyservices.com.