Current Report Filing (8-k)
15 Julho 2020 - 5:55PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 15, 2020
CHAPARRAL ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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001-38602
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73-1590941
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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701 Cedar Lake Boulevard
Oklahoma City, OK
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73114
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code: (405)
478-8770
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities Registered pursuant to Section 12(b) of the Act:
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Title of each class
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Ticker
symbol(s)
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Name of each exchange
on which registered
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Class A common stock, par value $0.01 per share
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CHAP
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The New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01
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Entry into a Material Definitive Agreement
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On July 15, 2020, Chaparral Energy, Inc. (the Company), certain lenders party thereto (the Lenders), Royal Bank of
Canada, as Administrative Agent and Issuing Bank and the other parties thereto, entered into a Limited Forbearance Agreement (the Forbearance Agreement) under the Companys Tenth Restated Credit Agreement, dated as of
December 21, 2017 (as amended, modified or supplemented, the Credit Agreement).
Pursuant to the Forbearance Agreement, the
Lenders agreed, during the forbearance period, to forbear from exercising any remedies under the Credit Agreement for any default or event of default resulting from any failure by the Company or any of its subsidiaries to make all or any part of the
required interest payment due on July 15, 2020 (the Interest Payment) with respect to the Companys 8.75% senior notes due 2023 (the Notes) (such default, the Specified
Default). Any failure by the Company to make the Interest Payment with respect to the Notes on or prior to July 15, 2020 would constitute an event of default under the Credit Agreement.
The forbearance period began on July 15, 2020 and continues until 5:00 p.m. (Central Time) on July 29, 2020, unless terminated
earlier as described below. During the forbearance period, all outstanding loans under the Credit Agreement will bear interest at the default rate under the Credit Agreement as long as any event of default exists. In addition, each Eurodollar
borrowing will be converted into an ABR borrowing at the end of its current interest period.
The Forbearance Agreement will terminate prior to its
scheduled expiration if, among other reasons, another default or event of default (excluding the Specified Default) occurs under the Credit Agreement or if the Company fails to comply with the terms of the Forbearance Agreement). The Forbearance
Agreement also provides the following milestones that must be met to avoid early termination of the forbearance period:
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At or prior to 5:00 p.m. (Central Time) on July 20, 2020, the Company must propose a process and
timeline to the Administrative Agent for unwinding the Companys hedges and using all or a portion of the net cash proceeds from the hedge unwind to pay down its Credit Agreement loans. The proposed process and timeline must contemplate that:
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If the total net cash proceeds are less than or equal to $33 million, then the required loan repayment is
equal to $24 million or the total amount of those proceeds, whichever is less.
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If the total net cash proceeds are greater than $33 million, then the required loan repayment is equal to
the amount by which those proceeds exceed $9 million.
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At or prior to 5:00 p.m. (Central Time) on July 22, 2020, the Administrative Agent must have
(i) received from the Company a proposed deadline for completing the hedge unwind process described above and (ii) approved that proposed deadline in its sole discretion. Upon approval by the Administrative Agent, the Forbearance Agreement
will be automatically amended to include that additional milestone.
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At or prior to 5:00 p.m. (Central Time) on July 24, 2020, the Company must deliver a 13-week rolling operating budget and cash flow forecast to the Administrative Agent.
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The foregoing
description of the Forbearance Agreement is a summary only, does not purport to be complete, and is qualified in its entirety by reference to the complete text of the Forbearance Agreement, which is filed herewith Exhibit 99.1 and incorporated
by reference herein.
Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
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The information set forth under
Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
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Item 2.04
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Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
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The information set forth under Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
Item 7.01.
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Regulation FD Disclosure
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At this time, the Company has elected not to make the approximately $13.1 million Interest Payment with respect to the Notes. Under the indenture
governing the Notes, the Company has a 30-day grace period to make the Interest Payments before that non-payment constitutes an event of default with respect
to the Notes. The 30-day grace period expires on August 14, 2020. The Company is engaged in discussions with its lenders and noteholders regarding the terms of a potential comprehensive restructuring
of its indebtedness.
Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits
The exhibit listed in the following Exhibit
Index is filed as part of this Current Report on Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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CHAPARRAL ENERGY, INC.
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Dated: July 15, 2020
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By:
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/s/ Justin Byrne
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Name:
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Justin Byrne
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Title:
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Vice President and General Counsel
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Chaparral Energy (NYSE:CHAP)
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