C&J Energy Services Ltd. (CJES) announced that it has entered into a Restructuring Support Agreement (the "RSA") with certain of its secured lenders representing greater than 50% of the outstanding principal amount under the Company's secured credit facility (the "Secured Credit Facility").  The terms of the RSA provide for the implementation of a restructuring (the "Restructuring") that contemplates, among other things, a debt-to-equity conversion of the entire Secured Credit Facility and an equity rights offering, which will be effectuated through a Chapter 11 plan of reorganization.  The Restructuring will enable the Company to substantially deleverage its balance sheet – eliminating approximately $1.4 billion of existing debt – while continuing daily operations in the normal course.

Notably, the RSA provides for debtor-in-possession ("DIP") financing in the form of a $100 million senior secured delayed-draw term loan facility being provided by certain lenders who are parties to the RSA.  The Company will also raise $200 million of additional capital through a backstopped rights offering.  In addition, after emergence from the Restructuring, the Company intends to raise at least $100 million in exit financing through an ABL credit facility.

President, Chief Executive Officer and Chief Operating Officer Don Gawick commented, "We are pleased to enter into this Restructuring Support Agreement, which is a significant step forward in our ongoing efforts to delever our capital structure, strengthen our business and respond proactively to the challenging market environment.  The agreed-upon restructuring plan represents a strong endorsement by our stakeholders in the future of our Company.  The exchange of debt for equity will provide us with a significantly deleveraged balance sheet, and we will emerge from this process as a stronger company with an infusion of new equity capital through a backstopped equity rights offering.  After a thorough evaluation of our options, we are confident that we have reached a deal that is highly advantageous for C&J and will provide solid financial footing to enable us to capitalize on future opportunities as the commodity pricing environment begins to recover."

Loeb & Loeb LLP, Kirkland & Ellis LLP and Fried, Frank, Harris, Shriver & Jacobson LLP are serving as legal counsel to the Company.  Evercore ISI serves as the Company's financial advisor and AlixPartners serves as the Company's restructuring advisor.

Cortland Capital Market Services LLC, as Administrative Agent under the Secured Credit Facility, and the Steering Committee of lenders, are being advised by Davis Polk & Wardwell LLP, FTI Consulting, Inc. and Moelis & Company. 

C&J Energy Services is a leading provider of well construction, well completions, well support and other complementary oilfield services to oil and gas exploration and production companies.