Altera Infrastructure’s disclosure statement hearing set for Oct. 6

By Sarah Lizee

Olympia, Wash., Sept. 1 – Altera Infrastructure LP’s hearing on approval of the disclosure statement for its pre-packaged Chapter 11 plan is scheduled for Oct. 6, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company entered into a restructuring support agreement with holders of about 71% of its funded debt, including ultimate parent Brookfield Business Partners LP and a super-majority of its bank lenders.

The RSA contemplates 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 debt issued by Altera Infrastructure, a comprehensive reprofiling of Altera’s bank loan facilities to better align cash flow with debt service obligations, and the continued support of equity sponsor Brookfield.

The comprehensive reprofiling of the bank facilities will include maturity extensions, interest and amortization relief, and other covenant relief. Holders will agree to the satisfaction of their Altera Parent guarantees in exchange for warrants to acquire their pro rata share of 7.6% of the new common stock of Reorganized Altera Parent.

Brookfield will equitize more than $750 million of the debt in return for 100% of the common equity in reorganized Altera Parent, together with equitization of a proposed debtor-in-possession facility, described below.

The comprehensive reprofiling of the bank facilities will include maturity extensions, interest and amortization relief, and other covenant relief. Holders will agree to the satisfaction of their Altera Parent guarantees in exchange for warrants to acquire their pro rata share of 7.6% of the new common stock of Reorganized Altera Parent.

The consenting bank lenders will agree to the debtors’ consensual use of their cash collateral.

A corporate reorganization, the result will be a “siloed” structure providing for cross-guarantees to the bank lenders and direct ownership by reorganized Altera parent of the shuttle tankers business and floating production storage and offloading (FPSO) joint ventures.

Some of the consenting bank lenders and Brookfield will agree to provide commitments for an about $183 million new-money financing facility to fund the debtors’ portion of the financing of the Knarr FPSO upgrade costs under the Knarr contract.

The Altera Parent unsecured notes will be equitized in exchange for their pro rata share of the new warrants.

In the event that any class of bank lenders votes to reject the plan, the restructuring support agreement provides for the return of the collateral securing their allowed credit agreement claims or treatment otherwise in compliance with section 1129(b)(2)(A) of the bankruptcy code.

General unsecured claims at subsidiary debtors, trade and contract claims, and administrative and priority claims will generally be paid in full in cash in the ordinary course of business.

All existing common and preferred equity in Altera Parent will be canceled without any distribution.

Altera is a Westhill, U.K.-based supplier of infrastructure assets to the offshore energy industry. The company filed bankruptcy on Aug. 12 under Chapter 11 case number 22-90130.

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