On January 6, 2017, C&J Energy Services announced that it has successfully completed its financial restructuring and emerged from Chapter 11 bankruptcy, having satisfied all of the conditions to the effectiveness of its plan of reorganization (the “Plan”). Through this financial restructuring, C&J has significantly improved its financial position by eliminating approximately $1.4 billion of debt from its balance sheet, as well as more than $80 million of annual interest expense.
Additionally, the Company has entered into a new $100 million revolving credit facility and paid off outstanding amounts under its prior debtor-in-possession facility with proceeds from a $200 million equity rights offering. Combining its cash balance after emergence with the available borrowing capacity under the new credit facility, the Company is exiting its restructuring with over $220 million of total liquidity.
Effective immediately, Legacy C&J common stock will be cancelled pursuant to the Plan. The Company issued seven-year warrants to former holders of Legacy C&J common stock, based on their pro rata share of Legacy C&J common stock as of January 6, 2017, exercisable for up to an aggregate of 2% of the Company’s new common stock (the “New Common Stock”) at a strike price of $1.55 billion.
C&J will have approximately 55.5 million shares of New Common Stock outstanding after the reorganization, which will be issued to certain holders of Legacy C&J’s secured debt claim in accordance with the debt-for-equity conversion provisions of the Plan, a rights offering and a backstop commitment agreement.
The New Common Stock and the warrants will not be traded on a national securities exchange, and the Company intends to pursue a listing on a national securities exchange as soon as reasonably practicable. C&J will continue to file Exchange Act reports with the U.S. Securities and Exchange Commission (“SEC”).
Additional information about C&J’s Chapter 11 proceeding (including letters and FAQs addressed to our key stakeholders) is available via the links below. Details of the Plan, the new revolving credit facility, the New Common Stock, the warrants and the Rights Plan can be found in the Company’s prior filings with the SEC, as well as in a Current Report on Form 8-K to be subsequently filed with the SEC on or around January 6, 2017.
If you have additional questions or concerns not addressed in the Frequently Asked Questions section, please call our toll-free restructuring information line at (866) 296-8019 or email our claims agent at [email protected]
The information and links contained herein, and elsewhere on this website, include certain statements and information that may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “plan,” “estimate,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “potential,” “would,” “may,” “probable,” “likely,” and similar expressions that convey the uncertainty of future events or outcomes, and the negative thereof, are intended to identify forward-looking statements. Forward-looking statements, which are not generally historical in nature, include those that express a belief, expectation or intention regarding our future activities, plans and goals and our current expectations with respect to, among other things: the potential impact of the Chapter 11 Proceeding on the Company’s operations, management, customers, suppliers, employees and other third-party stakeholders, our ability to develop, confirm and consummate a plan under Chapter 11 or an alternative restructuring transaction and emerge from the Chapter 11 Proceeding as a going concern, our business strategy, our financial strategy, our financial position, including operating cash flows, the availability of capital and our liquidity, our ability to continue as a going concern, our future revenue, income and overall financial and operating performance, our ability to sustain and improve our utilization, revenue and margins, our ability to maintain acceptable pricing for our services, future capital expenditures, our ability to finance equipment, working capital and capital expenditures, our ability to execute our long-term growth strategy, including expansion into new geographic regions and business lines, our plan to continue to focus on international growth opportunities, and our ability to successfully execute and capitalize on such opportunities, our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements, and the timing and success of future acquisitions and other strategic initiatives and special projects.
Forward-looking statements are not assurances of future performance and actual results could differ materially from our historical experience and our present expectations or projections. These forward-looking statements are based on management’s current expectations and beliefs, forecasts for our existing operations, experience, expectations and perception of historical trends, current conditions, anticipated future developments and their effect on us, and other factors believed to be appropriate. Although management believes the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Our forward-looking statements involve significant risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks associated with the following: risks and uncertainties associated with the Chapter 11 Proceeding, including our ability to develop, confirm and consummate the Restructuring Plan or an alternative plan under Chapter 11 or alternative restructuring transaction, including a sale of all or substantially all of our assets, which may be necessary to continue as a going concern, ability to maintain relationships with suppliers, customers, employees and other third parties as a result of our Chapter 11 Proceeding, our ability to obtain the approval with respect to motions or other requests made to the Bankruptcy Court in our Chapter 11 Proceeding, including maintaining strategic control as debtors-in-possession, our ability to obtain sufficient financing to allow us to emerge from the Chapter 11 Proceeding and execute our business plan post-emergence, failure to satisfy our short- or long-term liquidity needs, including our inability to generate sufficient cash flow from operations or to obtain adequate financing to fund our capital expenditures and meet working capital needs, the effects of the Chapter 11 Proceeding on the Company and on the interests of our various constituents, including holders of our common shares, Bankruptcy Court rulings in the Chapter 11 Proceeding as well as the outcome of all other pending litigation and the outcome of the Chapter 11 Proceeding in general, the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 Proceeding, risks associated with third party motions in the Chapter 11 Proceeding, which may interfere with our ability to confirm and consummate a plan of reorganization, the potential adverse effects of the Chapter 11 Proceeding on our liquidity and results of operations, increased advisory costs to execute a reorganization, the impact of the New York Stock Exchange's delisting of our common shares on the liquidity and market price of our common shares and on our ability to access the public capital markets, a decline in demand for our services, including due to declining commodity prices, overcapacity and other competitive factors affecting our industry, the cyclical nature and volatility of the oil and gas industry, which impacts the level of exploration, production and development activity and spending patterns by the oil and gas industry, a decline in, or substantial volatility of, crude oil and gas commodity prices, which generally leads to decreased spending by our customers and negatively impacts drilling, completion and production activity and therefore impacts demand and pricing for our services, which negatively impacts our results of operations, including potentially resulting in impairment charges, pressure on pricing for our core services, including due to competition and industry and/or economic conditions, which may impact, among other things, our ability to implement price increases or maintain pricing on our core services, the loss of, or interruption or delay in operations by, one or more significant customers, the failure to pay amounts when due, or at all, by one or more significant customers, changes in customer requirements in markets or industries we serve, costs, delays, regulatory compliance requirements and other difficulties in executing our long-term growth strategy, including those related to expansion into new geographic regions and new business lines, the effects of future acquisitions on our business, including our ability to successfully integrate our operations and the costs incurred in doing so, business growth outpacing the capabilities of our infrastructure, adverse weather conditions in oil or gas producing regions, the effect of environmental and other governmental regulations on our operations, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for our hydraulic fracturing services, the incurrence of significant costs and liabilities resulting from litigation, the incurrence of significant costs and liabilities resulting from our failure to comply, or our compliance with, new or existing environmental regulations or an accidental release of hazardous substances into the environment, expanding our operations overseas, the loss of, or inability to attract key management personnel, a shortage of qualified workers, the loss of, or interruption or delay in operations by, one or more of our key suppliers, operating hazards inherent in our industry, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage, and accidental damage to or malfunction of equipment.
The foregoing list of factors is not exclusive. For additional information regarding known material factors that could affect our operating results and performance, please see C&J’s most recently filed Annual Report on Form10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, which are available at the SEC’s website, http://www.sec.gov. All subsequent written or oral forward-looking statements concerning C&J are expressly qualified in their entirety by the cautionary statements above. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law.