Cypress Environmental Partners Announces Pre-Packaged Court Restructuring And Expected Delisting Of Common Units From NYSE

Author: Bill Haddad | May 09, 2022 07:07am

 

TULSA, Okla.--(BUSINESS WIRE)-- Today, Cypress Environmental Partners, L.P. (NYSE:CELP) (“Cypress” or the “Company”) announced the next step in its previously announced plan to pursue a court-supervised restructuring. On May 8, 2022, Cypress entered into a Restructuring Support Agreement (the “RSA”) with Argonaut Private Equity (“Argonaut”), a Tulsa-based private equity firm and the sole senior secured lender of the Company, pursuant to which Argonaut agreed to vote in favor of a joint pre-packaged plan of reorganization of the Company and its subsidiaries (the “Plan”) under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”). The Plan was filed with the U.S. Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) on May 8, 2022. The RSA and the Plan contemplate a debt-to-equity recapitalization transaction, whereby Argonaut will receive 100% of the new equity interests of the reorganized company (“Reorganized Company”) in exchange for extinguishing the obligations to Argonaut remaining under the Company’s credit agreement (the “Reorganization Transaction”). In addition, the Plan provides for the payment in full of priority and trade claims and an equity commitment from Argonaut to provide working capital to the Reorganized Company upon emergence. Argonaut will also provide a Debtor-In-Possession loan (the “DIP Facility”) to Cypress to fund operations, if necessary.

The Reorganization Transaction will provide the Reorganized Company with a fresh start, deleveraging its balance sheet, providing a stable platform for the Reorganized Company to grow post-emergence, and preserving over 350 high-paying jobs for the Company’s employees. Cypress expects to operate in the ordinary course of business during these proceedings with minimal disruption.

Given the amount of Cypress’ outstanding senior secured debt, which currently totals $58.1 million, Cypress continues to expect that the Reorganization Transaction will result in its outstanding common units (“Common Units”) and Series A preferred units (including accrued and unpaid distributions) having no value. As a result, Cypress anticipates that the New York Stock Exchange (the “NYSE”) will announce its intention to delist Cypress’ common units (the “Common Units”), which are currently listed on the NYSE under the symbol “CELP.” Upon delisting of the Common Units, the Company intends to file a Form 15 with the U.S. Securities and Exchange Commission (the “SEC”) to voluntarily deregister its Common Units and suspend its reporting obligations under the Securities Exchange Act of 1934, as amended. Bankruptcy Court approval is required to engage or retain professional services firms including independent registered public accounting firms, and consequently, Cypress will be unable to file its Quarterly Report on Form 10-Q for the three months ended March 31, 2022 prior to the SEC filing deadline on May 16, 2022.

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Posted In: CELP