I have suspected for some time that ATP and the DIP had this all planned out before the BK filing was ever made. The terms of the DIP were very onerous and required a POR in a very short time frame. So short in fact, that it basically precluded any real chance of a POR.
The auction was scheduled very quickly as a result and both ATP and the DIP knew before the market did, that the cross collateralized term ORRI/NPI’s act as a de-facto poison pill, scaring away any bidder other than the DIP. That is exactly what happened, the DIP was the only bidder. Meanwhile, they get the term ORRI/NPI but into question as to whether they are debt or real property and transferred out of the BK court purview, clearing the way for a quick BK approval.
The result? The common and all creditors other than CS and their buddies get zip, the term ORRI/NPI are tied up in court for years, ATP is named interim operator (who else is going to do it?) and the term sheet shows the escape hatch for select ATP management and the employees. CS and their buddies simply exchanged 95% of the DIP (and whatever 2nds they held) for a 90+% ownership of ATP. Now all they have to do is raise $300-500M in new equity, install their guys on the board, get the ATP management they want to keep to accept some stock that is vested in a few years to replace what they lost in the BK and viola, they can do an IPO in a couple of years. They still have the North Sea stuff and Israel assets as well as any claims against BP and cash flow from Clipper, without all the debt and some/all of the term ORRI/NPI, it was the best option. The common and the 2nds never had a chance in this deal. |
