Each one in plain English, with the numbers worked through for a shareholder.
18 Feb 2014substantial holder notice● Neutral
GSO Palmetto Opportunistic Investment Partners LP, GSO Credit-A Partners LP, GSO Special Situations Fund LP, GSO Special Situations Overseas Master Fund Ltd, GSO Special Situations Overseas Fund Ltd, GSO Palmetto Opportunistic Associates LLC, GSO Credit-A Associates LLC, GSO Holdings I L.L.C, GSO Capital Partners LP, GSO Advisor Holdings L.L.C, Blackstone Holdings I L.P, Blackstone Holdings I/II GP Inc, The Blackstone Group L.P, Blackstone Group Management L.L.C, Bennett J. Goodman, J. Albert Smith III, Douglas I. Ostrover, STEPHEN A. SCHWARZMAN reported no remaining GMX RESOURCES INC shareholding in its periodic institutional filing.
On Jan 22, 2014 the bankruptcy court confirmed the reorganization plan, though it was not yet effective pending conditions. Senior secured noteholders (allowed at $338 million) receive the new common stock and/or interests in a new partnership; general unsecured creditors, including the convertible, old senior and 2018 second-priority noteholders, share in a creditor trust and $1.5 million in cash. On the effective date all rights of common stock and preferred holders (including the 9.25% Series B) are terminated with no property received, and the company is renamed Thunderbird Resources Equity Inc. as a private company. This resolves the open question of shareholder treatment: existing shareholders get nothing.
On Dec 11, 2013 GMX and its DIP lenders signed Amendment No. 2 to the $50M DIP loan, extending its maturity to February 17, 2014 and loosening covenants so the subsidiaries contemplated by the proposed plan can be formed (qualification or bonding costs capped at $750,000). The filing also discloses Amendment No. 1 (Sep 30, 2013), described as immaterial, and notes the final DIP order was entered May 6, 2013. This keeps funding in place while the plan is pursued; it does not change what shareholders receive.
On Sep 30, 2013 GMX, certain 2017 senior secured noteholders and the unsecured creditors' committee signed a plan support agreement. Under its term sheet the senior secured noteholders get 100% of the equity in the reorganized company (and/or an affiliate) for their roughly $338 million secured claim, the 2018 second-priority notes are treated as unsecured, and unsecured creditors get a litigation trust with $1.5 million in cash if their class accepts. All existing equity interests are to be cancelled. This replaces the earlier asset sale route with a plan of reorganization, still subject to court approval (hearing set for Oct 29, 2013) and confirmation.
On May 15, 2013 GMX and its subsidiaries signed an asset purchase agreement with GMXR Acquisition LLC, acting for the first-lien 2017 noteholders, to sell substantially all assets for $338 million paid as a credit bid of their notes, plus assumed liabilities. This is the noteholder sale flagged when the bankruptcy was filed; it is subject to court approval and higher or better competing bids. GMX states that if the assets are sold at the credit bid amount it does not expect any cash or other assets to be available for distribution to equity holders. Some of the buying lenders are also 5% shareholders, including affiliates of Chatham and GSO.
On Apr 3, 2013 the bankruptcy court approved on an interim basis a DIP loan facility of up to $50M led by Cantor Fitzgerald as agent, with up to $20.0M available initially. It pays the Eurodollar or Base Rate plus 10% (2% floor), is secured on substantially all assets with superpriority status, and is due by the earliest of 180 days after Apr 1, 2013, a plan, or a sale of substantially all assets. Some lenders are also 2017 noteholders and 5% shareholders (including Chatham and GSO affiliates). This funds the case, but the superpriority claim comes ahead of shareholders.
The NYSE told GMX on Apr 1, 2013 that its common stock and 9.25% Series B preferred will be delisted because of the bankruptcy filing and uncertainty over the outcome for common holders. GMX will not appeal, and trading was suspended Apr 1, 2013. This ends the NYSE compliance thread, and shares lose their exchange listing.
Anthony Melchiorre, Chatham Asset Management, LLC reported a GMX RESOURCES INC shareholding of 505,198 shares (6.82% of votes) in a periodic institutional filing.
On Apr 1, 2013 GMX and its subsidiaries Diamond Blue Drilling and Endeavor Pipeline filed Chapter 11 in the Western District of Oklahoma, pursuing an asset purchase agreement with certain 2017 secured noteholders. This accelerates or defaults all its debt: $48.296M 2015 convertibles, $1.97M 2019 notes, $294.34M Series A and $30.0M Series B 2017 notes, and $51.458M 2018 notes, with enforcement stayed. The 60%-owned Endeavor Gathering is not in the filing. A sale to noteholders suggests shareholders may receive little, but the filing does not state any equity treatment.
GSO Palmetto Opportunistic Investment Partners LP, GSO Credit-A Partners LP, GSO Special Situations Fund LP, GSO Special Situations Overseas Master Fund Ltd, GSO Special Situations Overseas Fund Ltd, GSO Palmetto Opportunistic Associates LLC, GSO Credit-A Associates LLC, GSO Holdings I L.L.C, GSO Capital Partners LP, GSO Advisor Holdings L.L.C, Blackstone Holdings I L.P, Blackstone Holdings I/II GP Inc, The Blackstone Group L.P, Blackstone Group Management L.L.C, Bennett J. Goodman, J. Albert Smith III, Douglas I. Ostrover, STEPHEN A. SCHWARZMAN disclosed a new substantial GMX RESOURCES INC shareholding (7.00% of votes).
On Mar 4, 2013 GMX missed the interest payment on its 2018 second-priority notes (about $2.1M in cash or $2.8M in stock). This is not yet an event of default under those notes, which allow 30 days, but it could trigger defaults on the $48.3M 2015 notes, $324.3M 2017 notes and $51.5M 2018 notes. GMX says it may voluntarily seek bankruptcy protection if it cannot reach a consensual restructuring with Jefferies' help. Separately, the NYSE said on Feb 26 that GMX's market value (about $49.2M average) fell below the $50M required given a $134.5M stockholders' deficit. GMX has 45 days to submit a plan to cure within 18 months. This shifts the story from price compliance to a possible restructuring.
GMX amended its shareholder rights plan and preferred stock terms so that one right stays attached to each share after a reverse stock split effective Jan 3, 2013. It also adjusted the convertible note conversion rates (2013 notes from 30.7692 to 2.3669; 2015 notes from 53.3333 to 4.1026, including a correction of a formula error). This follows the earlier NYSE price-compliance problem; the filing does not give the split ratio, though the conversion rate changes are consistent with a 1-for-13 split (inference).
GSO Palmetto Opportunistic Investment Partners LP, GSO Credit-A Partners LP, GSO Special Situations Fund LP, GSO Special Situations Overseas Master Fund Ltd, GSO Special Situations Overseas Fund Ltd, GSO Palmetto Opportunistic Associates LLC, GSO Credit-A Associates LLC, GSO Holdings I L.L.C, GSO Capital Partners LP, GSO Advisor Holdings L.L.C, Blackstone Holdings I L.P, Blackstone Holdings I/II GP Inc, The Blackstone Group L.P, Blackstone Group Management L.L.C, Stephen Schwarzman, Bennett J. Goodman, J. Albert Smith III, Douglas I. Ostrover disclosed a new substantial GMX RESOURCES INC shareholding (6.90% of votes).
