DALLAS, Texas, March 28, 2016 (GLOBE NEWSWIRE) -- Southcross Holdings LP (“Holdings”) announced today that it has filed a pre-packaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code (the “POR”) in the Southern District of Texas to continue its financial restructuring (the “Proceedings”). If approved, the POR is expected to result in the elimination of almost $700 million of funded debt and preferred equity obligations of Holdings along with a new equity investment from certain of its existing equity holders. Holdings anticipates that, among other things, it will receive court authority to continue to pay all of its trade creditors, suppliers and contractors in the ordinary course of business and any amounts owed by Holdings to these parties will not be impacted by the Proceedings.
Southcross Energy Partners, L.P. (“Southcross”) and its subsidiaries are not included in the Proceedings and their operations and employees, customers, suppliers, partners, and other constituents are not affected. Southcross Energy Partners GP, LLC is also not a part of the Proceedings.
On March 21, 2016, Holdings commenced solicitation of votes for the POR. As of this morning, 100% of the votes that have been submitted in every voting class have accepted the POR. As a result, Holdings now has sufficient votes in both number and amount to carry every voting class under the POR. The deadline to vote to accept the POR is 4:00 P.M. Eastern Time today.
To fund operations during the Proceedings, certain of Holdings’ owners will provide up to $85 million in debtor-in-possession financing. An additional $85 million will be provided upon the effective date of the POR. In exchange for this $170 million investment, such owners will receive two-thirds of the equity of reorganized Holdings. Holdings believes that this process provides the swiftest and most efficient means to restructure its debt, bring its capital structure in line with current commodity prices, and provide adequate liquidity to support operations and any funding requirements, including potential equity needs at Southcross.
Parties seeking additional information related to the reorganization may call +1 (800) 708-8796 or visit http://dm.epiq11.com/Southcross. Holdings has also posted FAQs on its website at http://www.southcrossholdings.com. This press release is not a solicitation to accept or reject the proposed plan of reorganization referred to herein or an offer to sell or a solicitation of an offer to buy any securities of Holdings.
About Southcross Holdings LP
Southcross Holdings LP, through its subsidiary Southcross Holdings Borrower LP, owns 100% of Southcross Energy Partners GP, LLC, the general partner of Southcross, as well as a portion of Southcross’ common units, and all of Southcross’ subordinated units and Class B convertible units. Holdings also owns natural gas gathering and treating assets as well as NGL pipelines and fractionation facilities in South Texas.