The information set forth in Items 3 and 6 of this Schedule 13D are incorporated herein by reference.
On August 7,2019, the Issuer and its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas (the “Chapter 11 Cases,” and such court, the “Bankruptcy Court”). On September 24,2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Debtors’ Joint Prepackaged Plan of Reorganization, as modified by the Confirmation Order (the “Plan”). On the Effective Date, the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. The descriptions of the Plan and the Confirmation Order included in this Schedule 13D do not purport to be complete and are qualified in their entirety by reference to the full text of the Plan and the Confirmation Order, which were filed as Exhibit 2.1 to the Issuer’s Current Report on Form 8K on September 26,2019. All capitalized terms used in this section but not otherwise defined have the meanings set forth in the Plan.
On August 2,2019, Fund X Delaware, Fund Xb Holdco, Fund Xb Delaware and VOF Holdings entered into a backstop commitment agreement (“BCA”) with the Company and certain of the other Senior Noteholders (the “Backstop Parties”), pursuant to which the Backstop Parties agreed to backstop the Senior Noteholder Rights Offering. Pursuant to the BCA, the Backstop Parties committed to (i) exercise their respective rights to purchase their pro rata share of shares of Common Stock available to be purchased in the Senior Noteholder Rights Offering (the “Rights Offering Shares”) and (ii) backstop the aggregate Senior Noteholder Rights Offering and purchase the shares of Common Stock available in the Senior Noteholder Rights Offering to the extent unsubscribed (the “Backstop Commitment”). In consideration of each Backstop Party’s Backstop Commitment, each Backstop Party was entitled to receive on the Effective Date 6% of such Backstop Party’s Backstop Commitment (in the form of shares of Common Stock) issued at a price per share equal to the price per share offered to Senior Noteholders in the Senior Noteholder Rights Offering. In addition, on the Effective Date, by operation of the Plan, holders of the Issuer’s 6.75% Senior Notes due 2025 (the “Old Notes”, and holders thereof, the “Senior Noteholders”) received (among other things), in exchange for the surrender and cancellation of such Old Notes, their pro rata share of approximately 91% of the shares of Common Stock outstanding as of the Effective Date, subject to dilution by the Rights Offering Equity, the Warrant Equity, the MIP Equity, and the Common Stock issued pursuant to the Backstop Commitment Premium. Accordingly, in connection with (i) the exchange of such Old Notes, (ii) the Senior Noteholder Rights Offering and (iii) the Backstop Commitment, including shares of Common Stock issued as the Backstop Commitment Premium, the Issuer issued to Fund X Delaware, Fund XB Holdco, Fund Xb Delaware and VOF Holdings an aggregate of 3,988,088 shares of Common Stock. The Subject Shares were subsequently transferred to OCM HLCN.
CUSIP No. 40537Q803
Page 11 of 15 Pages
Under the Issuer’s amended organizational documents, Oaktree was entitled to designate one member to the Issuer’s postreorganization board of directors (the “Board”). Oaktree appointed Allen Li to serve as a director on the Board.
The Reporting Persons acquired the Subject Shares for investment purposes. The Reporting Persons will continuously evaluate the Issuer’s businesses and prospects, alternative investment opportunities and all other factors deemed relevant in determining whether additional shares of Common Stock will be acquired by the Reporting Persons or, if applicable, their affiliates or whether the Reporting Persons or, if applicable, any such affiliates will dispose of shares of Common Stock. At any time, additional shares of Common Stock may be acquired or some or all of the shares of Common Stock beneficially owned by the Reporting Persons may be sold, in either case in the open market, in privately negotiated transactions or otherwise. Other than as described in this Schedule 13D, none of the Reporting Persons and, to the best of their knowledge, none of the Covered Persons has any current plans or proposals which relate to or would result in any of the matters described in Items 4(a)(j) of Schedule 13D. However, as part of their ongoing evaluation of their investment in the Subject Shares and investment alternatives, the Reporting Persons may consider such matters in the future and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, the Reporting Persons may hold discussions with or make formal proposals to management or the Board, other shareholders of the Issuer or other third parties regarding such matters.