Chesapeake Energy to file for bankruptcy this week
The company failed to make an interest payment of nearly $10 million on debt
Stocks impacted: Chesapeake Energy Corp. (CHK)
The Oklahoma City-based company is preparing to file for bankruptcy as soon as this week and is in the final stages of negotiating a roughly $900 million debtor-in-possession loan to support its operations while under Chapter 11 bankruptcy-court protection. The firm failed to make an interest payment of nearly $10 million on debt due on June 15. Another interest payment obligation is due on July 1. Chesapeake is also attempting to negotiate an equity infusion from creditors to help it emerge from bankruptcy proceedings. If the company manages to emerge from bankruptcy, the creditors would take over Chesapeake in exchange for eliminating more than $7 billion of its debt. A Chapter 11 filing could come on Thursday, however, the timing could be extended to next week depending on how the negotiations play out. Chesapeake Energy stocks finished nearly 2% lower on Monday and will likely suffer deeper losses today.
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