Chesapeake said Monday that Kirkland & Ellis LLP has advised the company since 2010 and continues to provide advice as it “seeks to further strengthen its balance sheet following its recent debt exchange”.
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Chesapeake Energy Corp. shares fell 51 percent in early trading Monday but eventually rebounded after it denied reports it hired restructuring and bankruptcy specialists at Kirkland & Ellis.
Chesapeake, which has more than $10 billion in debt, has been hit by a steep fall in both oil and gas prices. Most recently, Chesapeake suspended its preferred dividend, which it estimates will help them to save $170 million annually. Like other companies, Chesapeake took on a lot of debt during the boom years to finance its expansion. A voice mail and e-mail left with the company’s media relations office weren’t immediately returned.
By late previous year, Chesapeake had cut about 15 percent of its workforce and wrote down the value of some oil and gas assets, adding to impairment charges the company had already booked.
Analysts expect the company to post a loss of 16 cents per share when it posts quarterly results on February 24, widening from a loss of 5 cents last quarter.
Williams didn’t immediately respond to calls seeking comment.
Chesapeake Energy’s notes due in March plunged by a record amount, to 74.5 cents from 95 cents last week, according to Bloomberg.
Last month, Standard & Poor’s downgraded Chesapeake’s credit rating from B to CCC+, while keeping the outlook as Negative with another downgrade looming.
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The company’s bonds led losses among high-yield debt on Monday. The company’s debt leverage is unsustainable, S&P said.
