KKR & Co‘s Samson Resources Corp may file for Chapter 11 bankruptcy protection by mid-September, the Wall Street Journal reported on Friday, citing sources familiar with the matter.
The oil and gas producer finalized a restructuring plan with key creditors and will hand over its ownership to them, wiping out roughly $4.1 billion investment of KKR and its partners, the report said.
KKR’s shares, which closed at $22.86 on the New York Stock Exchange, fell more than 7 percent in extended trading.
Samson was acquired by a team of investors led by KKR for $7.2 billion in 2011, in a deal that was seen as overpriced.
Samson’s board has approved the plan and will file for bankruptcy by Sept. 16 when it faces the final payment deadline on certain bonds, the Journal said.
The company in February hired restructuring advisers and in March warned that it would file for bankruptcy protection if it were unable to refinance its debt obligations.
Samson’s second-lien lenders will put in as much as $485 million in cash and pay down $250 million in senior loans, the Journal said.
Bondholders, who were owed $2.25 billion, could get a small stake in the new company, the Journal said.
About 43 percent of Samson’s second-lien lenders have agreed to support the deal, and the company intends to seek broader creditor support in the coming days, the Journal said.
Both KKR and Samson Resources were not immediately available to comment outside regular business hours.