Extraction Oil & Gas (XOG) has announced that it has voluntarily filed for petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Shares are now falling 30% in Monday's pre-market trading.“After months of liability management and careful analysis of our strategic options, we determined that a voluntary chapter 11 filing with key creditor support provides the best possible outcome for Extraction,” said Extraction CEO Matt Owens.At the same time, XOG revealed that it has obtained a committed $125 million debtor-in-possession financing facility, with $50 million in new money, up to $15 million of which will become immediately available upon the Bankruptcy Court’s order, and a “roll up” of $75 million of revolving loans under Extraction’s existing revolving credit agreement.The DIP Facility is underwritten by Wells Fargo Bank, National Association and the $50 million in new money is financed by certain existing lenders.According to Extraction Oil & Gas, this funding would provide sufficient liquidity during the chapter 11 cases to support its continuing business operations and minimize disruption.And to ensure a ‘swift exit from chapter 11’, XOG also announced a restructuring support agreement with certain of its unsecured noteholders.This includes a restructuring plan with significant deleveraging of the balance sheet through a debt-for-equity swap, which XOG says will leave the debtors’ unsecured noteholders with the majority of equity while still providing a meaningful recovery to junior stakeholders.“Though the company was unable to obtain consensus across its entire prepetition capital structure prior to filing, the company plans to use the chapter 11 process to build consensus for a comprehensive restructuring transaction” XOG stated.Shares in Extraction have plunged 70% year-to-date, and the stock shows a bearish Moderate Sell Street consensus. The average analyst price target of $0.6 indicated that shares had room to fall even further. (See XOG stock analysis on TipRanks).“While the company has some solid assets in the DJ Basin, we think it is not fundamentally designed for oil prices below $50/bbl” RBC Capital’s Brad Heffern wrote back in May after the company provided some cautionary language about its value as a going concern and revealed that it had hired strategic advisors to help pursue a restructuring.“We see XOG struggling to cover debt maturities in 2024+, and transportation commitments limit the company’s ability to substantially curtail uneconomic drilling” he added.Related News: First Majestic Seeks Help In Mexico Tax Dispute, As Analyst Applauds Springpole Deal 2 Dividend Stocks Yielding More Than 5%; RBC Says ‘Buy’ RWE, Thyssenkrupp Plan Hydrogen Production Partnership – Report More recent articles from Smarter Analyst: * Israel Is Said To Be In Talks To Buy Moderna’s Covid-19 Vaccine Candidate * First Majestic Seeks Help In Mexico Tax Dispute, As Analyst Applauds Springpole Deal * Amazon Now Also Under Investigation By Washington State – Report * Blackstone To Invest $337 Million In Medtronic’s Diabetes Programs
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American Express (AXP) has announced that its joint-venture in mainland China has received approval from the People’s Bank of China (PBOC) for a network clearing license.This makes American Express the first foreign payments network to be licensed to clear RMB transactions in mainland China. The company expects to begin processing transactions later this year.“We look forward to welcoming millions of new consumers, businesses and merchants in China to American Express, as well as continuing to enhance our support for our global customers when they travel to the region” AXP commented.Express (Hangzhou) Technology Services Company Ltd is American Express’ joint venture with Lianlian DigiTech Co., Ltd, a Chinese fintech services company. The new joint venture has already built a network to clear domestic transactions charged on American Express cards, and is also compatible with the key mobile wallet players in China.“We are pleased to be the first foreign company to receive this license. This approval represents an important step forward in our long-term growth strategy and is an historic moment, not only for American Express but for the continued growth and development of the payments industry in mainland China,” cheered Stephen J. Squeri, CEO of American Express.Shares in AXP have plunged 18% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on AXP’s outlook. This is made up of 8 recent buy ratings, 8 hold ratings and 1 sell rating. Meanwhile the average analyst price target of $102 is in-line with the current share price. (See American Express stock analysis on TipRanks).RBC Capital analyst Jon Arfstrom has a hold rating on the stock but recently bumped up his price target from $85 to $105. “Overall billings activity remains depressed from softer global travel, though non-T&E (travel and expense) spending is gradually improving” he explained, adding that non-T&E activity should continue to accelerate through June.Related News: Activist Investor Jana Partners Builds 5.9% Stake in Perspecta; Stock Jumps 9% In Pre-Market Lululemon Drops 5% in Extended Trading After Quarterly Results Miss Bankrupt Hertz Pops 51% In Pre-Market On $1 Billion Share Sale Plan More recent articles from Smarter Analyst: * Extraction Oil & Gas Files For Bankruptcy; Announces $125M Funding Plan * Israel Is Said To Be In Talks To Buy Moderna’s Covid-19 Vaccine Candidate * First Majestic Seeks Help In Mexico Tax Dispute, As Analyst Applauds Springpole Deal * Amazon Now Also Under Investigation By Washington State – Report