Altera Infrastructure Enters Chapter 11 to Tackle Its Debt

UK-based Altera Infrastructure has entered a Chapter 11 bankruptcy process in the U.S. to address its debt of over $1.5 billion, reported. Formerly a part of Teekay, Altera Infrastructure is based in Westhill, Scotland and it is a supplier of infrastructure assets to the offshore energy industry. In a statement on Monday, the company said that it has executed a restructuring support agreement (the RSA) with approximately 71 percent of its funded debt obligations, which includes an investment management company Brookfield and a super-majority of its bank lenders. Altera emphasised that Altera Shuttle Tankers and FPSO joint ventures are not part of the restructuring process. All in, the RSA has been signed, or agreed to, by holders of 80 per cent of its funded debt obligations, which includes approximately 91 per cent of its bank lenders pending certain creditors’ internal credit approval processes. The terms of the RSA establish the framework for a consensual and comprehensive financial restructuring that will deleverage Altera’s balance sheet and position it for long-term growth and success. To implement the balance-sheet restructuring, Altera has started a chapter 11 process in the U.S. Bankruptcy Court for the Southern District of Texas. Among other things, the agreement contemplates addressing more than $1 billion of secured and unsecured holding company debt, $400 million of preferred equity, and $550 million of secured asset-level bank debt (including unsecured guarantees of such debt issued by Altera Infrastructure), a comprehensive reprofiling of Altera’s bank loan facilities to better align cash flow with debt service obligations, and the continued support of Altera’s equity sponsor, Brookfield. Read more.