HOUSTON, Jan. 31 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS) announced
today that its plan of reorganization was overwhelmingly accepted by its
creditors and stockholders and was confirmed by the United States Bankruptcy
Court for the District of Delaware. The effective date of the plan is
anticipated to be sometime in mid-February. The plan is subject to the
issuance of $30 million of convertible preferred stock and the funding of a
new exit facility on the effective date. Commitments are in place for both
the convertible preferred stock issue and the exit facility. The funds for
the preferred stock subscriptions were previously deposited into an escrow
account pending confirmation and effectiveness of the plan of reorganization.
The plan and confirmation order allow KCS to select, on or before the
effective date, from two alternative forms of exit facility, either an
approximate $175 million volumetric production payment for which KCS has a
signed commitment, or a $165 million secured bank loan for which KCS has a
proposed term sheet.
"We are pleased with the confirmation of our plan of reorganization which
will now permit us to focus all of our attention on building value in the
Company," said KCS President and Chief Executive Officer James W. Christmas.
"Once the plan becomes effective, the Company will formally emerge from
Chapter 11."
On the effective date of the plan, current shareholders will retain 100%
(75% on a fully diluted basis) of the common stock, all past due interest on
the Senior Notes and Senior Subordinated Notes will be paid, and the Company
will repay $60 million of its Senior Notes. The remaining $90 million
principal amount of its Senior Notes and $125 million principal amount of its
Senior Subordinated Notes will be renewed under amended indenture provisions,
but without a change in interest rates. In addition, the maturity date of the
Subordinated Notes has been amended from January 15, 2008 to January 15, 2006.
All other creditors will be paid in full on the effective date or in the
ordinary course of business.
KCS is an independent energy company engaged in the acquisition,
exploration, development and production of natural gas and crude oil with
operations in the Mid-Continent and Gulf Coast regions. The Company also
purchases reserves (priority rights to future delivery of oil and gas) through
its Volumetric Production Payment (VPP) program. For more information on KCS
Energy, Inc., please visit the Company's web site at
http://www.kcsenergy.com .
To receive KCS' latest news and other corporate developments via fax at no
cost, please call 1-800-PRO-INFO. Use company code KCS. See also
http://www.frbinc.com .
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Among the important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements are delays and difficulties in developing currently
owned properties, the failure of exploratory drilling to result in commercial
wells, delays due to the limited availability of drilling equipment and
personnel, fluctuations in oil and gas prices, general economic conditions and
the risk factors detailed from time to time in the Company's periodic reports
and registration statements filed with the Securities and Exchange Commission.
SOURCE KCS Energy, Inc.
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Related links:
http://www.kcsenergy.com
CONTACT:
James W. Christmas, President and CEO of KCS
Energy, 713-877-8006, or General, Marilyn Meek, 212-661-8030,
Analysts, Beth Lewis, 617-342-7003, or Media, David Closs,
212-661-8030, of The Financial Relations Board
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