Rockall Energy’s bid procedures, interim DIP financing approved

By Sarah Lizee

Olympia, Wash., March 14 – Rockall Energy Holdings, LLC received court approval of the bid procedures for its assets, according to an order filed Monday with the U.S. Bankruptcy Court for the Northern District of Texas.

As previously reported, the company said it had explored many alternatives prior to filing the Chapter 11 cases in an effort to deleverage its balance sheet, bolster its liquidity position and maximize value for stakeholders, including by pursuing a capital raise via a public offering, running an out-of-court sales process, and seeking to settle certain liabilities and modify contracts.

Ultimately, given the company’s liquidity position and significant debt service and other financial obligations, the company and its board of directors determined that pursuing an in-court sales process with the support of its secured lenders and filing the Chapter 11 cases was necessary.

The company said it is hoping to choose a stalking horse bidder and provide bid protections that would include a 2.5% breakup fee and a $400,000 expense reimbursement.

Under bid procedures, the company has until April 18 to choose a stalking horse, bids are due by 6 p.m. ET on April 29, an auction will be held on May 4, and a sale hearing will take place on May 13.

DIP financing

The company also received interim approval of a $51 million debtor-in-possession facility with prepetition lender Goldman Sachs Bank USA. The facility consists of $17 million in new money term loans and $34 million of DIP roll-up obligations.

Following the interim order, the company now has access to $5 million of the new money and $10 million of the roll-up.

Interest is SOFR plus 700 basis points with a 1% floor. There is a 2% commitment fee.

The financing is set to mature on 90 days after the petition date.

The company also received interim access to the cash collateral of its prepetition secured lenders.

The Dallas-based oil exploration and production company filed Chapter 11 bankruptcy on March 9 under case number 22-90000.

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