HOUSTON, Dec. 26 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS) announced
today that it has reached an agreement with the Official Committee of
Unsecured Creditors of KCS Energy, Inc., the noteholder members of the
Creditors' Committee acting in their individual capacities, and Credit Suisse
First Boston Corporation on an amended plan of reorganization.
Under the terms of the agreement, the Company will raise at least
$25 million in new preferred equity and will replace its two current bank
facilities with a single new credit facility. On the effective date of the
plan, current shareholders will retain 100% of the common stock, all past due
interest on the Senior Notes and the Senior Subordinated Notes will be paid,
trade creditors will be paid in full in the ordinary course of business, 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.
"We are very pleased that the significant improvement in the Company's
performance and financial condition have enabled us to reach an agreement with
the Creditors' Committee and our largest noteholders that should allow us to
soon emerge from Chapter 11", said KCS President and Chief Executive Officer
James W. Christmas. "Our agreement also asks the court to defer any hearing
on the three existing plans on file and consider only this consensual plan at
the confirmation hearing currently scheduled to commence January 30, 2001."
The principle terms of the agreement provide that on the effective date,
Senior Noteholders will receive a cash payment for past due interest as of
January 15, 2001, compounded semi-annually. In addition, the Company will
repay $60 million of Senior Notes plus accrued interest from January 15, 2001
to the effective date. The Senior Notes indenture will be amended to allow
for a new credit facility and to restrict the ability to repurchase
Subordinated Notes and stock. Subordinated Noteholders will receive a cash
payment for past due interest as of January 15, 2001, compounded
semi-annually. In addition, the maturity date of the Subordinated Notes will
be amended from January 15, 2008 to January 15, 2006.
The Company is currently arranging the private placement of $25 million of
preferred stock, convertible into common stock at $3.00 per share, and
negotiating the terms of a new senior secured credit facility that will
replace its two current bank facilities. Under the terms of the plan of
reorganization agreement, the Company must arrange commitments for the
preferred equity financing and complete negotiations of the terms of the new
credit facility by January 5, 2001.
The Company will file an amended plan of reorganization and supporting
supplemental disclosure statement, which is subject to bankruptcy court
approval.
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, Marilyn Meek, Media,
David Closs, 212-661-8030, Analysts, Beth Lewis, 617-342-7003,
all of The Financial Relations Board
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