A group of Weatherford International shareholders has organized with Brown Rudnick as legal advisor, according to sources. Brown Rudnick has scheduled a call for Monday, May 20, to grow the group, sources said.
According to sources, the shareholders are concerned with the
restructuring support agreement executed between the company and the ad hoc group of bondholders represented by Akin and Evercore. The group includes Franklin Resources, according to sources, which held
49% of notes maturing in 2021 or earlier as of Feb. 28. The RSA indicates that Weatherford has abandoned its liability management and transformation plans in favor of a chapter 11 filing backed by an RSA that cancels out existing equity while adopting a management incentive plan providing up to 5% of the new common stock in the reorganized company on a fully diluted basis.
On May 10, Weatherford announced it had executed an RSA with a group of noteholders holding approximately 62% of its senior unsecured notes and expects to implement the RSA through a prepackaged chapter 11 process and Irish examinership proceedings.
Under the terms of the agreement, unsecured noteholders would exchange approximately $7.4 billion of senior unsecured notes for approximately 99% of the equity in the company and $1.25 billion of new tranche B senior unsecured notes.
Weatherford shares are quoted at 36 cents on the NYSE and have traded between 35 and 40 cents since May 10.