1 July 2020listing compliance notice▼ BadMajor
Foresight Energy LP terminated the registration of a class of securities, ending its reporting obligation for them.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
1 July 2020bankruptcy or receivership▼ BadMajor
The plan took effect on June 30, 2020. All existing common and subordinated units were extinguished without consideration, and Foresight Energy LP, its general partner and Foresight Energy LLC are to be dissolved. Their assets were transferred to a new subsidiary of Foresight Energy Resources LLC, whose equity is the new common equity issued under the plan. The company says it will file a Form 15 soon, which suspends its SEC reporting, so this is expected to be the last substantive filing. This completes the restructuring that began with the March 10 filing.
25 June 2020bankruptcy or receivership▼ BadMajor
On June 24, 2020, the bankruptcy court confirmed Foresight's Chapter 11 plan, which cuts over $1 billion of debt and about $94 million of expected annual cash interest. Common and subordinated unit holders get no recovery (80,996,773 common and 64,954,691 subordinated units outstanding as of May 1, 2020). The company will emerge with a $225 million exit facility, $75 million of which converts to equity 60 days after closing, and about $60 million of cash liquidity. The plan is not yet effective, and the company says it cannot assure when or if it will be.
13 Mar 2020debt financing● NeutralMajor
On March 11, 2020, Foresight and its affiliates signed the $175 million debtor-in-possession loan that funds the Chapter 11 case, with Cortland Capital Market Services LLC as agent. $55 million of the $100 million new-money portion was funded at closing, $45 million is available after a final court order, and a $75 million roll-up of first-lien claims also needs that order. It runs 180 days unless a plan takes effect sooner, charges interest at LIBOR plus 11.00% (1.00% floor) or a base rate plus 10.00% (2.00% floor), and requires minimum liquidity of $20 million (rising to $40 million once the delayed draw is funded). This puts in place the DIP financing proposed in the restructuring agreement.
10 Mar 2020bankruptcy or receivership▼ BadMajor
This amendment replaces and supersedes the original March 10, 2020 8-K about the Chapter 11 filing and restructuring support agreement, including its exhibits. It restates the same terms: about $1.1 billion of debt cut, first-lien lenders get 92.75% and second-lien noteholders 7.25% of new equity (both subject to dilution), and existing common units, subordinated units, GP interests, warrants, options and incentive distribution rights are cancelled with no recovery. The filing says the DIP facility is $175M, the exit facility $225M, and that the RSA can be terminated, so completion is not assured. The text provided does not explain what changed from the original.
10 Mar 2020bankruptcy or receivership▼ BadMajor
On March 10, 2020, Foresight and its affiliates filed Chapter 11 in the Eastern District of Missouri with a restructuring support agreement backed by over 69% of first-lien lenders and over 82% of second-lien noteholders. It would cut about $1.1 billion of debt: first-lien lenders get 92.75% of the new equity and noteholders 7.25% (both subject to dilution), while all existing common units, subordinated units, general partner interests, warrants, options and incentive distribution rights are cancelled with no recovery. The bankruptcy filing accelerated the first-lien credit agreement and second-lien notes, and a $175M DIP loan and $225M exit loan are planned. This resolves the creditor negotiations and restructuring talks of the prior months. The plan can still be terminated, so it is not final.
27 Feb 2020security holder rights change▼ BadMajor
On Feb 26, 2020, holders of a majority of the second-lien notes agreed to extend the interest payment grace period again, from 150 to 180 days. Foresight says it continues to discuss restructuring alternatives with creditors. This is the third such extension since October 2019.
20 Dec 2019security holder rights change▼ BadMajor
On Dec 19, 2019, holders of a majority of the 11.50% second-lien notes agreed to extend the interest grace period from 90 to 150 days and to drop the requirement for periodic public conference calls. Foresight says it is still talking to creditors about restructuring. The header notes the NYSE filed Form 25 on Nov 25, 2019 and that the units now trade on the OTCQX under 'FELPU'. This continues the earlier October amendments.
25 Nov 2019listing compliance notice● NeutralMajor
Foresight Energy LP's exchange filed to remove a class of its securities from listing.
8 Nov 2019listing compliance notice▼ BadMajor
On Nov 8, 2019, the NYSE suspended trading in Foresight's common units and began delisting proceedings because of 'abnormally low' trading prices. This ends the six-month cure period from the June 2019 notice. Foresight will not appeal and has applied to trade on the OTCQX, but there is no assurance it will be accepted. Foresight says it stays subject to SEC reporting.
4 Nov 2019bankruptcy or receivership▼ BadMajor
On Oct 29, 2019, Murray Energy Holdings, which controls Foresight's general partner, and some of its subsidiaries (not Foresight itself) filed for Chapter 11 in Ohio. Foresight has a management services agreement, a lease, an overriding royalty agreement and coal-sale arrangements with Murray. The Bankruptcy Court on Oct 31 let Murray keep performing its dealings with Foresight, but the filing says these contracts could still be rejected or renegotiated, and the GP board has set up an independent conflicts committee.
31 Oct 2019security holder rights change▼ BadMajor
On Oct 30, 2019, holders of a majority of the 11.50% second-lien notes due 2023 agreed to extend the grace period for missing an interest payment from 30 to 90 days, and waived any default from the interest payment missed on Oct 1, 2019. The filing says the company is still talking with creditors about possible restructuring and warns of risks to its ability to continue as a going concern. This continues the debt strain visible in the earlier delisting-risk notice.
14 June 2019listing compliance notice▼ BadMajor
On June 13, 2019 the NYSE told Foresight its common units fell short of the listing rule requiring an average closing price above $1.00 over 30 trading days. Foresight has six months to cure, units keep trading on the NYSE meanwhile, and the company says it plans to tell the NYSE it expects to regain compliance. Delisting is not ordered by this notice.
25 Oct 2018debt financing● NeutralMajor
On October 19, 2018 Foresight settled its litigation with Natural Resource Partners over the Deer Run and Shay mines. Foresight pays WPP $25 million for disputed past-due amounts, and the Hillsboro lease is amended to cut annual minimum royalties from $30 million to $11 million through 2033, plus a 6% tonnage royalty. Foresight guarantees up to $50 million of the minimum royalties, and all claims are dismissed. This resolves the April 2018 lease dispute.
13 Apr 2018material agreement termination▼ BadMajor
On April 11, 2018 Foresight's Hillsboro subsidiary asked a court to declare that its Deer Run Mine lease with WPP LLC ended on March 26, 2015, because all mineable coal was mined by then. The company says Deer Run will be permanently closed and expects an impairment charge of $134 million to $172 million in the second quarter of 2018, with no significant cash cost. This continues the dispute with WPP over the 2015 force majeure declaration; the outcome of both actions is stated to be uncertain.
29 Mar 2017capital raising announcement● NeutralMajor
On March 28, 2017 Foresight completed the refinancing of its second-lien PIK notes, exchangeable PIK notes and old bank facilities using $425.0 million of new second-priority notes due 2023, a new $825.0 million term loan, a $170.0 million revolver (undrawn apart from letters of credit), the Murray Investment and cash. Murray Energy bought 9,628,108 new common units for $60.6 million, which repaid the $54.5 million of second-lien notes on March 27. The company then called the remaining second-lien notes for redemption on April 27, 2017 and deposited the cash, discharging them. This resolves the exchangeable-note threat of converting into 75% of the units (the filing says the exchangeable notes were refinanced) and the Feb 24 conditional redemption; the new Murray units dilute existing unitholders (inference).
17 Mar 2017material agreement● NeutralMajor
Foresight priced $425 million of 11.50% second-lien notes due 2023 at 99.25% (smaller and shorter than the $500 million 2024 notes first announced), alongside an $825 million first-priority five-year term loan and a $170 million four-year revolver. Closing was expected around March 28, 2017. Proceeds, plus an equity contribution from Murray Energy and cash on hand, are meant to refinance the PIK notes, the exchangeable PIK notes and the old credit facilities. Foresight also amended its August 2016 letter agreement with Reserves investors and Murray: the Reserves group may take part in the new debt, with a member expected to buy up to $20.0 million of the notes, and the company may not take on other debt outside the refinancing, the existing revolver or the receivables facility.
7 Mar 2017farm in farm out agreement● NeutralMajor
Foresight launched a private offering of $500 million of second-lien senior secured notes due 2024, to help refinance the 2021 second-lien PIK notes, the 2017 exchangeable PIK notes and its existing bank revolver and term loan. This follows the Feb 24 conditional redemption notice. If the deal and related transactions close, Murray Energy is expected to exercise its option to buy a further 46% voting interest in the general partner from Foresight Reserves and Michael Beyer, taking Murray to 80%; Christopher Cline would then leave the GP board, Robert Edward Murray would join it, and Robert D. Moore is expected to become chairman.
24 Feb 2017capital raising announcement● NeutralMajor
On February 24, 2017 Foresight's issuers gave a conditional notice to redeem $54.5 million of the second-lien PIK notes due 2021 at 110% of principal plus accrued interest, targeted for March 27, 2017 (may be delayed). It happens only if an equity offering raises enough cash and a new senior secured debt offering is priced. If completed, $296.2 million of the notes would remain outstanding. The filing does not say how large the equity offering would be or who would buy it.
6 Sept 2016capital raising announcement● NeutralMajor
On August 30, 2016 Foresight completed its global restructuring. It exchanged $599.825 million of 7.875% notes (including $105.354 million bought by Reserves in a tender offer) for $349.1 million of second-lien PIK notes due 2021, $299.859 million of exchangeable PIK notes and 516,825 warrants. The exchangeable notes bear 15% PIK interest and mature October 3, 2017; if not repaid in cash or bought (Murray Energy has a purchase right) by then, they convert into 75% of units, a heavy dilution risk for current unitholders. The filing says the restructuring eased the defaults tied to the 2015 change-of-control litigation, which has been dismissed with prejudice. This resolves the exchange, tender and forbearance threads, but the dilution risk remains open. Unitholders keep their units for now (inference: not an ending of their position).
25 Aug 2016material agreement● Neutral
Foresight and the trustee signed a supplemental indenture for the 7.875% Senior Notes, after the required noteholder consents were obtained on August 11, 2016. It removes a no-default condition for discharging the notes, and takes effect immediately before the exchange offer closes. The filing repeats that risks threaten the company's ability to continue as a going concern. This is a technical step in the restructuring, not its completion.
25 July 2016material agreement▼ BadMajor
On July 22, 2016 Foresight signed amended and restated support agreements with noteholders and bank lenders, joined by the Cline Group and Murray Energy. The revised terms: $117.6-120 million of 15% convertible PIK notes (now maturing September 30, 2017), $285.8-291.6 million of second-lien notes, and warrants for 4.5% of units. The PIK notes still convert into 75% of units if not redeemed or purchased. Reserves investors would tender for up to $105.4 million of notes. Lenders get a 0.25% consent fee and a 1.0% amendment fee, and would waive existing defaults once the amendment takes effect. The exchange offer must launch by August 1, 2016. This updates the May terms, with a later PIK maturity and a lower warrant percentage than the 7.5% figure in the earlier plan.
18 July 2016material agreement▼ BadMajor
The July 15 deadline passed without the restructuring closing. The noteholder support agreement's termination date was pushed to August 2, 2016, the lender support agreement to July 22 (extendable to August 5), and forbearance on the notes and the receivables facility to August 2 and August 15, 2016. Murray Energy, Foresight Reserves, Christopher Cline and Cline Development signed on to support the restructuring. The filing repeats that if an out-of-court deal fails, a Chapter 11 filing may be needed, in which unitholders would likely get little or no recovery.
3 June 2016listing compliance notice▼ Bad
Independent director Bennett K. Hatfield died on May 22, 2016, leaving the audit committee with two independent members instead of the three the NYSE requires. The NYSE sent an official notice on June 1, 2016; the owners of the general partner intend to appoint a third independent director to restore compliance. This is a listing-rule deficiency, separate from the restructuring.
23 May 2016material agreement▼ BadMajor
On May 17, 2016 Foresight signed a support agreement with some holders of the 7.875% Senior Notes, meeting the lender-set deadline. Non-affiliated noteholders would exchange notes for $114-120 million of 15% convertible PIK notes (maturing April 7, 2017) and $294-300 million of second-lien notes, plus warrants. If the convertible notes are not redeemed or purchased, they convert into 75% of the partnership's units, which would heavily dilute current unitholders. Foresight Reserves investors would also buy up to $106 million of notes in a tender offer, and the noteholder forbearance was extended to July 15, 2016. The filing says negotiations are not final, other stakeholders have not agreed, and risks threaten the company's ability to continue as a going concern.
9 May 2016material agreement● Neutral
On May 6, 2016 the bank lenders' support agreement was amended to give Foresight until May 17, 2016 to reach a matching agreement with holders of at least 66.67% of the 7.875% Senior Notes, and the noteholder forbearance was extended to May 17, 2016. This pushes back the deadlines in the April restructuring effort without resolving it; the filing says the extension is meant to allow more talks with noteholders and secured lenders.
18 Apr 2016material agreement▼ BadMajor
On April 18, 2016 Foresight signed a support agreement with some of its bank lenders for a proposed debt restructuring: revolver commitments cut by $75 million (another $25 million on December 31, 2016), interest rates up 1.00%, 50% excess cash sweep, tighter covenants, and waiver of existing defaults. The wider plan proposes swapping the 7.875% Senior Notes for new second-lien notes, including convertible PIK notes that if not redeemed would convert into 75% of the partnership's fully diluted equity, which would heavily dilute existing unitholders if it goes ahead. Noteholders and equityholders are not party to the agreement and key terms are still being negotiated.
2 Feb 2016material agreement▼ BadMajor
The filing says events of default have occurred under the receivables facility set up in January 2015, including a missed payment on the January 15, 2016 settlement date. On January 27, 2016 the lenders agreed to hold off on remedies until February 29, 2016, while the facility was permanently cut to $50 million, with borrowing capped at $41 million or less. No acceleration had been declared, and the filing gives no assurance the lenders will keep holding off if other defaults occur.
2 June 2015debt financing● Neutral
On May 27, 2015, Foresight's operating subsidiary added $50 million of revolving credit commitments and $60 million of incremental term loans under its 2013 credit agreement, on the same terms as the existing ones. Term loan proceeds were for working capital, general corporate purposes and fees on the deal. This adds to the company's secured debt.
20 Jan 2015material agreement● Neutral
On January 13, 2015, Foresight and some subsidiaries set up a $70 million receivables securitization program: subsidiaries sell customer receivables to a Foresight special-purpose subsidiary, which pledges them to PNC Bank and Credit Agricole for loans or letters of credit. It runs to January 12, 2018, and part of the funds will pay down the revolving credit facility. Foresight guarantees performance but not collectability of the receivables.