SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1999
MICHAEL PETROLEUM CORPORATION
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(Exact name of registrant as specified in its charter)
Texas 333-52263* 76-0510239
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
13101 Northwest
Freeway, Suite 320
Houston, Texas 77040
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (713) 895-0909
* The Commission File Number refers to a Form S-4 Registration Statement
filed by the Registrant under the Securities Act of 1933 which was declared
effective on July 22, 1998.
Item 5. OTHER EVENTS
On September 30, 1999, representatives of Michael Petroleum
Corporation (the "Company") delivered a revised debt restructuring proposal
to holders of the Company's 11 1/2% Senior Notes due 2005 (the "Senior Notes")
and the financial advisor for the unofficial committee of Noteholders. The
proposal contemplates issuing Common Stock of the Company in exchange for 50%
of the outstanding indebtedness evidenced by the Senior Notes, and New Senior
Notes in exchange for the remaining 50% amount. The Common Stock to be
issued in exchange for the Senior Notes would represent 50% of the
outstanding Common Stock of the restructured Company, before giving effect to
potential dilution for certain Warrants to be issued, as discussed below.
The revised proposal contemplates that the terms of the New Senior Notes
would retain the same interest rate and maturity as the Senior Notes, and
that certain covenants would be renegotiated. The revised proposal also
contemplates the issuance of Warrants to the existing shareholders of the
Company, containing exercise provisions so that, if exercised, the existing
shareholders of the Company would own in excess of a majority (up to 90%) of
the shares of outstanding Common Stock. The proposal contemplates that trade
creditors of the Company would be paid in full or otherwise remain unimpaired,
and the Company's outstanding $23 million indebtedness under its current bank
facility would be refinanced from the proceeds of a new credit facility to be
obtained. The restructuring could be implemented outside of insolvency
proceedings or in connection with court-supervised bankruptcy proceedings,
depending on the degree of Noteholder support for the alternative chosen.
The proposal described above is preliminary in nature and no predictions
can be made by Company management as to the degree of success the Company may
achieve in its negotiations with Noteholders, whether a restructuring or
refinancing of its Senior Note and senior bank indebtedness will be accomplished
on the terms described above, whether such a restructuring can be effected
outside of bankruptcy, if at all, or if accomplished, whether the Company will
be able to achieve its business plan objectives following such a restructuring.
Nothing contained in this report shall constitute an offer to purchase, sell or
exchange any security.
The Company will not make on October 1, 1999, the approximately $7.8
million interest payment then due on its Senior Notes. The Indenture under
which the Senior Notes were issued provides for a 30-day grace period before
an Event of Default will occur due to the nonpayment of interest. If the
interest payment is not made within the 30-day grace period, the Indenture
provides that the entire indebtedness under the Senior Notes may be declared
due and payable.
The Company is continuing to negotiate with the holders of the Senior Notes
and its senior bank lender in an effort to restructure the Company's
indebtedness.
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Certain statements made in this press release, including, but not
limited to, statements containing the words "will," "may," and similar words
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
based on management's current expectations and include known and unknown risks,
uncertainties and other factors, many of which the Company is unable to predict
or control, that may cause the Company's actual results or performance to differ
materially from any future results or performance expressed or implied by such
forward-looking statements. These statements involve risks, uncertainties and
other factors detailed from time to time in the Company's filings with the
Securities and Exchange Commission. Such factors include, without limitation,
the Company's ability to restructure or refinance its existing debt or
otherwise reorganize its current financial structure, achievement of its
drilling and development program objectives, and future prices for and
associated costs of the Company's oil and natural gas production. The
Company cautions investors that any forward-looking statements made by the
Company are not guarantees of the future performance. The Company disclaims
any obligation to update any such factors or to announce publicly the results
of any revisions to any of the forward-looking statements included herein to
reflect future events or developments.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MICHAEL PETROLEUM CORPORATION
By: /s/ ROBERT L. SWANSON
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Robert L. Swanson
Vice President -- Finance
Dated: September 30, 1999