Altera Infrastructure enters Chapter 11 to tackle its debt

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UK-based Altera Infrastructure has commenced Chapter 11 bankruptcy proceedings in the US to settle its debt of more than $1.5 billion.

Formerly part of Teekay, Altera Infrastructure is based in Westhill, Scotland and is a provider of infrastructure assets to the offshore energy industry. In a statement on Monday, the company said it had signed a Restructuring Support Agreement (the RSA) with approximately 71% of its debt funded, which includes an investment management company Brookfield and a super-majority of its bank lenders.

Altera emphasized that Altera Shuttle Tankers and FPSO joint ventures are not part of the restructuring process.

Overall, the RSA has been signed or accepted by holders of 80% of its funded debt securities, which includes approximately 91% of its bank lenders pending internal credit approval processes from some creditors. 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 initiated Chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of Texas.

Among other things, the agreement intends to address over $1 billion of the holding company’s secured and unsecured debt, $400 million of preferred stock, and $550 million of asset-level secured bank debt (including unsecured guarantees of such debt issued by Altera Infrastructure), a comprehensive re-profiling of Altera’s bank loan facilities to better align cash flows with debt service obligations, and continued support from Altera’s equity sponsor, Brookfield.

Additionally, Altera secured a commitment from Brookfield for $50 million in debtor-in-possession financing to help fund Altera’s restructuring process and ensure that normal course operations remain intact during the Chapter 11 process.

Altera asserts that it will operate its business in the normal course without interruption.

Ingvild SaetherCEO of Altera Infrastructure, said: “We are confident that this Chapter 11 process will result in a comprehensive recapitalization transaction that will not only stabilize liquidity, but also shrink our balance sheet and improve Altera’s position for future growth.”

Altera provides services to customers in the offshore oil and gas regions of the North Sea, Braziland the east coast of Canada. His fleet of 41 ships includes floating production, storage and offloading units, tank shuttles, floating storage and offloading units, long distance towing and offshore installation vessels and a maintenance and safety unit.

Earlier this month, an FPSO operated by Altera made headlines following a dispute over worker severance pay.

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