Nuverra Environmental Solutions. Inc 2021 Notes

Nuverra Environmental Solutions, Inc. (Nuverra) provides environmental solutions to customers focused on the development and production of oil and natural gas from shale formations. The Company's environmental solutions include delivery, collection, treatment, recycling, disposal of water, wastewater, waste fluids, hydrocarbons, and restricted solids that are part of the drilling, completion, and production of shale oil and natural gas.

Nuverra filed Chp 11 on May 1st with a pre-pack associated with its Restructuring Support Agreement between the Company and holders of 100% of the existing term loan debt, and approximately 86% of the Company's 2021 Notes (Supporting Noteholders).  

Nuverra's prepetition debt structure consisted of a $24.6m ABL Facility (unimpaired), a $80m Term Loan, 2021 Noteholders, and 2018 Noteholders.

Voting for the plan commenced on April 28th and ends May 26th with the Supporting Noteholders in favor of the plan. Holders of the 2018 also expect to vote in favor of the plan.  

The Company filed with $44m of DIP financing provided by the prepetition secured asset-based lenders and secured Term Loan lenders. 

Under the plan the 2021 Note Claims will receive 99.75% of the new reorganized Nuverra common stock and 2021 Noteholder Rights, with an expected recovery value between 43-55%. The 2018 notes receive the remaining .25% and similar rights. The 2021 Notes last traded at $10.80 on May 18th.  

The exercise price for the rights offering is calculated based on an assumed enterprise value of $350 million. The 2021 and 2018 Notes will both receive rights that will let them acquire its pro-rata share of $75m of new Nuverra common stock (150m total).

The post-reorg capital structure looks like this:

Lazard is the company's investment banker and places the firm's enterprise value between 270-335m, with an equity value between 230-295m.  I strongly suggest you read the Disclosure Statement for the methodology.

A hearing for the the Disclosure Statement and the Plan is set for June 21st at 10am, with objections due by the afternoon of June 12th.

The case is presided over by the Hon. Kevin J. Carey in the District of Delaware.

The docket is here:

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