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Unit Corp. to Miss $21 Million Interest Payment; Financial Trouble

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Unit Corp. to Miss $21 Million Interest Payment; Financial Trouble

Unit Corp is electing to not make its $21.5 million interest payment.  See below.  This is the first sign that the company will likely file chapter 11 bankruptcy.

Unit Corp controls, the E&P arm, Unit Petroleum and a drilling company.

One should not be surprised as the company issued a "going concern" in its 10k filed on March 9, 2020.

Item 8.01  Other Events.

On May 15, 2020, the Company elected to utilize a 30-day grace period with respect to, and not to make, the approximate $21.5 million semi-annual interest payment that was due on May 15, 2020 (the “Interest Payment Date”) under the Company’s outstanding 6.625% Senior Subordinated Notes Due 2021 (the “Subordinated Notes”). Under the indenture dated as of May 18, 2011, as supplemented by the First Supplemental Indenture dated as of May 18, 2011 and the Second Supplemental Indenture dated as of January 7, 2013 (collectively, the “Indenture”), by and among the Company, the subsidiary guarantors parties thereto and Wilmington Trust National Association (as successor to Wilmington Trust FSB), as trustee, which governs the Subordinated Notes, the Company has a 30-day grace period after the Interest Payment Date before an event of default would occur on June 14, 2020. The occurrence of an event of default under the Indenture would give the trustee or the holders of at least 25% of principal amount of the outstanding Subordinated Notes the option to declare all of the Subordinated Notes due and payable immediately upon such event of default. Failure to make the interest payments on the Subordinated Notes when due at the end of the 30-day grace period would also constitute an event of default under the Credit Agreement. The occurrence
2
 
of an event of default under the Credit Agreement would allow the Lenders having at least two-thirds of the total commitment under the Credit Agreement (or the Administrative Agent, with the consent of such lenders) to declare the Company’s obligations under the Credit Agreement immediately due and payable and to exercise the Lenders’ other rights under the Credit Agreement.
March 9, 2020 - 10k filing


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