Bankruptcy / Restructure Update | Financial Trouble | Capital Markets

Southcross Energy Partners Files for Bankruptcy

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   |    Monday,April 01,2019

Southcross Energy Partners has filed for bankruptcy.

Southcross intends to use the restructuring process to evaluate a range of options for the Company, including a sale of the business, the divestiture of certain assets or a standalone restructuring plan that would strengthen the Company’s financial position, accelerate future growth and enable Southcross to better serve customers. The Company continues to engage in constructive discussions with its lenders and other stakeholders regarding the terms of a financial restructuring plan and is focused on achieving a resolution as expeditiously as possible.

James W. Swent III, Chairman, President and Chief Executive Officer of Southcross said: “Over the course of the last several years, Southcross has continued to adapt to the changing and challenging market environment in which we operate, but our strong underlying business has continued to labor under a heavier debt burden than most of our competitors. Our objective is to use the restructuring process to explore a range of strategic alternatives, including a potential sale of the Company, while on a parallel track, we are working to restructure our balance sheet to reduce leverage, enhance flexibility and prepare for a potential emergence as a viable, more profitable company. We are confident that these are the right steps to deliver value for the benefit of our stakeholders.

“We appreciate the ongoing hard work and commitment of the entire Southcross team. I am confident our employees will continue to focus on our day-to-day operations and provide our customers the quality of service they have come to expect from Southcross. We are also grateful for the ongoing support of our vendors, suppliers and other business partners during the restructuring process.”

Southcross has received a commitment for $255 million in debtor-in-possession (“DIP”) financing from its current lenders. Upon Court approval, the new financing and cash generated from the Company’s ongoing operations will be used to support the business during the reorganization and sale process.