Furie Operating Alaska OK’d to enter acquisition by foreclosure deal

By Caroline Salls

Pittsburgh, March 9 – Furie Operating Alaska, LLC obtained a second order approving entry into an acquisition by foreclosure agreement with Kachemak Exploration LLC, according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Furie announced on Dec. 5 that HEX, LLC had been the winning bidder for its assets following a court-supervised auction process.

However, the company said that it subsequently attempted to negotiate a purchase agreement to embody the terms of HEX’s bid, but HEX failed to make required deposits on Dec. 24 and Jan. 10 or to provide proof of its financial ability to close the purchase by Jan. 10.

In addition, Furie said HEX failed to execute a purchase agreement consistent with the terms of its bid or otherwise negotiate an agreement in good faith.

As a result, Furie said it notified HEX that it was no longer a qualified bidder.

Under the acquisition by foreclosure agreement, Kachemak will acquire equity interests under transactions to be completed via a plan of reorganization.

In connection with the acquisition, Kachemak will pay $2 million to Furie, to be used solely to satisfy fee claims and administrative claims, waive the total principal amount of loans made by Furie’s Melody debtor-in-possession financing lenders and assume all cure claims, subject to the satisfaction of specified conditions.

In light of the superior offer received from Kachemak, and in exchange for financial accommodations, Furie and alternate bidder and lender agent Energy Capital Partners Mezzanine Opportunities Fund A, LP agreed to allow ECP to withdraw from the sale.

ECP/McGinty DIP claims will be refinanced on the plan effective date with a new $12 million senior term loan that will accrue interest at Libor plus 700 basis points and mature on the fourth anniversary of the plan effective date.

Tax credit claims will be refinanced with a new four-year $62 million tax credit loan from ING Capital LLC that will bear interest at Libor plus 400 bps.

The ECP lenders will receive a new five-year $3 million term loan with no interest.

The Melody lenders will receive, subject to their election to receive preferred equity, a new five-year $26 million term loan with no interest.

Holders of general unsecured claims and existing interests will receive no distribution.

Furie is an Anchorage-based independent energy company. The company filed bankruptcy on Aug. 9, 2019 under Chapter 11 case number 19-11781.

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