Basic Energy Services Inc. (NYSE: BAS) and certain subsidiaries entered into a forbearance agreement with over 81% of the holders of the 7.75% senior notes due 2019 with respect to the previously announced 30-day grace period related to an $18.4 million payment of interest under the 2019 notes. Basic Energy Services has elected not to make the interest payment upon the expiration of the 30-day grace period. Under the forbearance agreement, the unsecured noteholders have agreed to forbear from exercising their rights and remedies, including the right to accelerate any indebtedness, through September 28, 2016 in connection with the interest payment default.
Additionally, the company's secured lenders have agreed to provide temporary waivers of certain existing and future defaults under the Term Loan and ABL Facility related, in part, to the missed interest payment.
A note from Capital One Securities following the news listed Basic Energy Services’ total liquidity at the end of the second quarter 2016 near $140 million, “but 6/30 net debt of ~$920MM is out of line w/ projected '18 EBITDA of ~$75MM,” said Capital One Securities’ Luke M. Lemoine. “We're still looking for a longer-term restructuring plan that gets BAS's overall debt down to manageable levels,” he continued.