Fracking company Samson Resources prepares for bankruptcy

Posted on Thursday, August 6th, 2015 at 7:17 pm    

The fracking company Samson Resources, owned by Henry Kravis, is reportedly filing for bankruptcy protection. The New York Post claims that Kohlberg Kravis Roberts & Co. L.P. will lose its $2 billion investment in the power conversion technology company. Samson Resources and other fracking businesses are suffering in the market due to higher production costs. As a result, prices are down and costing the company substantial amounts in lost revenue.

A prepackaged bankruptcy deal was struck with second-lien lenders Cerberus Capital Management, Silver Point Capital, and Credit Suisse. Together, these corporations own approximately $1 billion in debt. In exchange for their loans, these three businesses will take control over Samson Resources.

The investors will give an additional $300 million to pay senior levels. This will only dent the $947 million owed to these additional lenders. However, some senior lenders, such as JPMorgan, have agreed to issue further loans after the company is restructured.

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