PHILADELPHIA, PA / ACCESSWIRE / December 18, 2020 / Atlas Energy Group, LLC (OTC PINK:ATLS) (the "Company") filed its Certificate of Cancellation with the Delaware Secretary of State on November 20, 2020. The Certificate of Cancellation was filed following the Company's receipt of approval from the holders of a majority of its outstanding common units as part of the transactions contemplated by the Exchange Agreement (the "Exchange Agreement Transactions") as previously announced. As a result, the Company has ceased all operations.
The Company's cancellation was expected following the execution of an exchange agreement (the "Exchange Agreement") with the holders of the Company's first and second lien term loans (the "Loans").
The original principal balance of the Loans on March 31, 2016 was $70.9 million. In consideration of the Company's significant liquidity issues, declining resources, and increasing debt, the Company believed the restructuring contemplated by the Exchange Agreement was the only practicable way to satisfy its outstanding obligations of approximately $108.5 million under the Loans and provide for an orderly and expeditious wind-down of the Company's operations.
Pursuant to the Exchange Agreement, in consideration for the satisfaction and discharge of all obligations of the Company under the Loans, the Company transferred to the Lenders (the "Exchange Consideration"):
- an 80.01% membership interest in Atlas Growth Partners GP, LLC and 500,001 common units representing limited partner interests in Atlas Growth Partners, L.P.;
- 1,250,000 shares of stock of Falcon Minerals Corporation (valued at $2,850,000 as of April 28, 2020);
- $1,100,000 in cash; and
- 3,165,405,210 newly issued common units of the Company (which represented an amount equal to 99% of the Company's fully diluted pro forma voting and economic interests).
The parties agreed that the newly issued common units of the Company would be valued at the volume-weighted average trading price per common unit over the five consecutive trading day period ending on the tenth trading day after the May 1, 2020 announcement.
Following the transfer of the Exchange Consideration, the Company's primary remaining asset was 100% of the membership interests in Titan Energy Management, which owned a 2% preferred member interest in Titan Energy, LLC, which was terminated and forfeited on November 16, 2020 pursuant to a restructuring and liquidation transaction of Titan Energy.
As a result of the Exchange Agreement Transactions, the Company expects that its unitholders may recognize cancellation of indebtedness income ("CODI") equal to the excess of the adjusted issue price of the Company's obligations under the Loans over the value of the Exchange Consideration. The CODI will be allocated to the Company's unitholders who held their units immediately prior to the effective time of the Exchange Agreement and will be reportable on such unitholders' separate tax returns. The Company has made arrangements to have unitholders' Schedule K-1s issued in accordance with applicable Internal Revenue Code rules and regulations.
The Loans were held primarily by Riverstone Credit Partners L.P. and the Lee and Toby Cooperman Foundation. Former members of management of the Company also held an approximate 12% interest in the Loans.
Cautionary Note Regarding Forward-Looking Statements
Certain matters discussed within this press release are forward-looking statements. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The Company does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. This document contains forward-looking statements that involve a number of assumptions, risks, and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. The Company cautions readers that any forward-looking information is not a guarantee of future performance. Such forward-looking statements include, but are not limited to, statements about future financial and operating results, resource potential, and the Company's plans, objectives, expectations, intentions, and other statements that are not historical facts. Risks, assumptions, and uncertainties that could cause actual results to materially differ from the forward-looking statements include, but are not limited to, those associated with general economic and business conditions; changes in government environmental policies and other environmental risks; the availability of drilling equipment and the timing of production; tax consequences of potential balance sheet and other transactions; and global health conditions, including the impact of COVID-19. Forward-looking statements speak only as of the date hereof, and the Company assumes no obligation to update such statements, except as may be required by applicable law.
CONTACT:
Investor Relations
1-877-280-2857
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SOURCE: Atlas Energy