HOUSTON, Feb. 21 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS) announced
today that it has completed the necessary steps for its plan of reorganization
to go effective and has emerged from bankruptcy. As previously reported, the
plan was overwhelmingly accepted by KCS' creditors and shareholders and
confirmed by the United States Bankruptcy Court for the District of Delaware,
subject to the issuance of $30 million of new convertible preferred stock and
the funding of a new exit facility in the form of either a volumetric
production payment or a new secured bank credit facility.
For its exit facility, the Company entered into a volumetric production
payment with an affiliate of Enron North America Corp. selling approximately
17.3% of its proven oil and gas reserves to be delivered in accordance with an
agreed schedule over the next five years for net proceeds of approximately
$176 million. These funds together with the proceeds from the issuance of the
preferred stock and available cash were used to repay the Company's two bank
credit facilities in full, pay past due interest on the Senior and Senior
Subordinated Notes and repay $60 million of Senior Notes. The remaining
$90 million principal amount of Senior Notes and $125 million principal amount
of Senior Subordinated Notes will be renewed under amended indenture
provisions, but without a change in interest rates. Trade creditors will be
paid in full on the effective date or in the ordinary course of business and
Shareholders will retain 100% of their common stock, subject to dilution for
conversion of the new preferred stock.
"We are very pleased that the significant improvement in the Company's
performance and financial condition have enabled us to complete our plan of
reorganization and emerge from Chapter 11 a much stronger company. Our debt
has been reduced from over $400 million to $215 million today. In addition to
the $185 million reduction in debt, we expect to have over $30 million in cash
on hand at the end of February," said KCS President and Chief Executive
Officer James W. Christmas.
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, Inc., 713-877-8006; or General Info, Marilynn Meek,
Media, David Closs, 212-661-8030, or Analysts, Beth Lewis,
617-342-7003, all of The Financial Relations Board
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