Dixie Electric, LLC, d/b/a Expanse Energy Solutions, filed for chapter 11 protection in Delaware on Friday along with various affiliates. Dixie is a Houston-based, privately held electrical infrastructure materials and services provider in the energy and oil industry. Dixie filed with a restructuring support agreement in hand. And the company is on a fast-track to implement a pure balance sheet restructuring. Under the agreement, lenders will exchange $300 million in funded debt for equity in the company. Prepetition secured lenders have also agreed to provide $17.5 million in debtor-in-possession financing and $30 million in exit financing to the company. General unsecured claims are unimpaired and slated to be paid in full.
Dixie blames its bankruptcy filing on decreased drilling and well completion activity. A recent slump in oil and gas prices triggered this drop in business. And tightness in the skilled labor market and unprofitable lump-sum contracts exacerbated the company’s problems. As a result, Dixie’s adjusted EBITDA plummeted from a peak of over $71 million in 2014 to negative $6.5 million in 2017. The company’s credit ratings have also deteriorated as losses mounted.
Dixie’s “first day” motions have been approved by the bankruptcy court. The hearing on its combined plan and disclosure statement is scheduled for December 13, 2018 in Delaware. Additional information about the case is available here.