SandRidge Files For 'pre-arranged' Reorganization Under Chapter 11

SandRidge Energy Inc. said Monday it has filed for a "pre-arranged" reorganization under Chapter 11 supported by an agreement with creditors that own more than two thirds of its $4.1 billion in funded debt obligations. The company, which was forced into bankruptcy by the prolonged slump in oil prices and now trades over-the-counter, said the support agreement includes a reserve-based lending facility and the conversion to equity of about $3.7 billion of other funded debt. The company's pro forma capital structure will consist of $425 million in first lien RBL debt, maturing in 2020, and $300 million in mandatorily convertible debt that will accrue interest on a non-cash basis and convert into equity at the earlier of certain conversion events or four years from the effective date of the Chapter 11 plan of reorganization. The company expects to have enough liquidity to fund operation and its capital program through Chapter 11 without the need for further capital. Shares were slightly lower in premarket trade.