BANKRUPTCY PLAYS

[sludgehound]

Peregrine Midstream Partners LLC filed a chapter 11 plan that proposes to slash the natural gas storage company's debts by more than $249 million .
The plan, filed Monday with the U.S. Bankruptcy Court in Wilmington, Del. , is the product of last month's deal under which key lenders pledged their support for a restructuring that will see them forgive several hundred million dollars in debt in exchange for new debt and/or equity in the reorganized business.
The lenders that have signed the plan-support agreement include ING Capital LLC , Royal Bank of Canada and Sumitomo Mitsui Banking Corp. , according to court papers.
Houston -based Peregrine and its affiliates sought chapter 11 protection on Feb. 2 after the construction of its Ryckman Creek natural gas storage facility in Wyoming ran into trouble, including a fire that caused substantial damage, and contributed to the company's debt load.
Construction began on Ryckman Creek in 2011. The storage facility, which still isn't running at full capacity, connects with multiple pipelines and allows for the transportation of gas to California , Nevada , the northern Rocky Mountain range, the Pacific Northwest and Midwest.
Peregrine also trades and produces natural gas.
The chapter 11 plan filed Monday would cut Peregrine's debt load by more than $249 million , though court papers indicate that amount may change, leaving the reorganized company with an estimated $195 million in debt on its books. The value of its new equity hasn't yet been disclosed.
To carry out the restructuring, Peregrine is proposing that lenders owed roughly $330 million will get new notes and equity. The plan also proposes converting Peregrine's $35 million bankruptcy loan, from lenders led by ING, into the same amount of bankruptcy-exit financing.
The recovery of general unsecured creditors, whose total claims aren't yet known, is subject to several contingencies, including whether they vote for or against the plan. Existing equity will be canceled, and shareholders wouldn't receive any payment under the plan. The restructuring would see the Peregrine entity dissolved, with the reorganized parent and operating companies keeping the Ryckman name.
The plan is subject to a creditor vote and bankruptcy-court approval. Upcoming hearings in the bankruptcy case have been scheduled for April 26 , May 18 and July 7 , court papers show.
Write to Jacqueline Palank at [e-mail]

(END) Dow Jones Newswires
04-12-16 1245ET
Copyright (c) 2016 Dow Jones & Company, Inc.