Virgin Orbit comes back down to earth

BY Richard Summerfield

Virgin Orbit Holdings, Inc. and its US subsidiaries, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court in the District of Delaware. The company, which is 75 percent owned by Virgin Group, has filed for bankruptcy in order to seek a sale of its assets.

Virgin Investments, one of Virgin Orbit’s sister companies, will inject $31.6m into the satellite launcher to help it stay afloat while the business searches for a new owner. Virgin Orbit said it planned to pay its suppliers and vendors “to the fullest extent possible” and was committed to working with customers to try to find a buyer “able to continue to fulfil their needs”.

“The team at Virgin Orbit has developed and brought into operation a new and innovative method of launching satellites into orbit, introducing new technology and managing great challenges and great risks along the way as we proved the system and performed several successful space flights – including successfully launching 33 satellites into their precise orbit,” said Dan Hart, chief executive of Virgin Orbit. “While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business. We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the Company. At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale.

“I’m incredibly grateful and proud of every one of our teammates, both for the pioneering spirit of innovation they’ve embodied and for their patience and professionalism as we’ve managed through this difficult time,” he continued. “Today my thoughts and concerns are with the many talented teammates and friends now finding their way forward who have been committed to the mission and promise of all that Virgin Orbit represents. I am confident of what we have built and hopeful to achieve a transaction that positions our Company and our technology for future opportunities and missions.”

In late March, the company announced it was laying off 85 percent of its 750 staff and ceasing operations for the foreseeable future as it was unable to raise sufficient out-of-court capital to continue operating its business. The company aborted the UK’s first satellite launch from Cornwall in January, blaming an “anomaly”.

News: Virgin Orbit: Richard Branson's rocket firm files for bankruptcy

Sartorius acquires Polyplus in €2.4bn deal

BY Fraser Tennant

In a deal designed to strengthen its activities supplying cell and gene therapy companies, life science group Sartorius is to acquire French drugmaker Polyplus from private investors for approximately €2.4bn.

To finance the acquisition, Sartorius will receive a bridge loan facility from JP Morgan for a transitional period. Sartorius intends to refinance this loan with long-term financing instruments which might also include an equity component.

Founded in 2001 and based in Strasbourg, France, Polyplus has locations in France, Belgium, the US and China. The company has been expanding its focus beyond transfection reagents through acquisitions in adjacent technologies like plasmid design, and protein and plasmid manufacturing, broadening its upstream portfolio for gene therapies as well as gene-modified cell therapies.

“The innovative solutions of Polyplus are highly complementary to our portfolio, in particular to our offering of cell culture media and critical components for the development and manufacture of advanced therapies,” said René Fáber, member of the executive board and head of the bioprocess solutions division at Sartorius. “There are also strong synergies with our portfolio of downstream solutions for the manufacture of gene therapeutics.”

The combination of Sartorius’ and Polyplus’ portfolios creates a unique ability to optimise the total process workflow to deliver unparalleled value for cell and gene therapy customers, in an effort to make these critical therapies more affordable.

“This acquisition is a major milestone in the history of Polyplus, and a recognition of its innovative upstream market leadership position and our highly talented Polyplus teams around the world,” said Mario Philips, chief executive of Polyplus. “We would be excited to join forces with a world class bioprocess market leader as Sartorius.”

The transaction – which is expected to close during the third quarter of 2023 – is subject to customary conditions, including completion of the information and consultation of the works’ council and approval by regulatory authorities.

Mr Faber concluded: “As a leading supplier of critical components to produce cell and gene therapies, Sartorius and Polyplus together will be excellently positioned to play a significant role in the dynamic field of cell and gene therapy.”

News: Sartorius to buy Polyplus for 2.4 bln euros

Crescent Point acquires Spartan Delta assets in $1.7bn cash deal

BY Fraser Tennant

Despite current volatility in oil prices, oil and gas company Crescent Point Energy Corp. is to acquire the oil and liquids-rich Montney assets in Alberta of fellow energy company Spartan Delta Corp. in a deal valued at $1.7bn.

Under the terms of the definitive agreement, Spartan shareholders are expected to receive $9.50 per common share through the deal with Crescent Point, which is the second sizeable acquisition among Canadian explorers and producers this year after 2022 saw a drop in deals due to volatile oil prices.

The all-cash deal will see Calgary-based Crescent Point acquire 600 drilling locations in the Montney region, adding 38,000 barrels of oil equivalent per day to the company's production inventory.

The transaction also significantly grows Crescent Point’s presence in what is one of North America's largest unconventional petroleum resources, and immediately boosts excess cash flow per share by 20 percent.

“Over the past five years, we have fundamentally rebuilt and strengthened Crescent Point,” said Craig Bryksa, president and chief executive of Crescent Point. “As a result of our efforts, and after closing this transaction, our asset base will include significant inventory depth in both the Kaybob Duvernay and the Montney, while also maintaining significant low-decline assets in Saskatchewan that provide additional excess cash flow.”

Following the sale, Spartan intends to develop its remaining Alberta Deep Basin assets and spin off a portion of its remaining production to build a new growth-focused Montney junior company called Logan Energy Corp. with assets in Alberta and British Columbia.

“This transaction sees the successful conclusion of our strategic repositioning process with our core Montney development asset sale, the creation of a new growth-focused Montney junior company and the retention of our sustainable Free Funds Flow and dividend generating assets in the Deep Basin,” said Fotis Kalantzis, president and chief executive of Spartan. “I thank our shareholders, employees, board, stakeholders, and other supporters who helped cultivate this successful outcome.”

The transaction is anticipated to close during second quarter 2023, subject to regulatory approvals and customary closing conditions.

Mr Bryska concluded: “The Montney acquisition is immediately accretive to our per share metrics, enhances our return of capital to shareholders and is aligned with our long-term strategy to focus on high quality, scalable resource plays that meet our defined asset criteria.”

News: Crescent Point Energy to buy Spartan Delta's Montney assets for $1.2 bln

Origin Energy acquired for $10.21bn

BY Richard Summerfield

A consortium comprising Brookfield Renewable Partners, GIC, Temasek and MidOcean Energy, a liquefied natural gas (LNG) company formed and managed by EIG, has agreed to acquire Australian integrated electricity generator, and electricity and natural gas retailer Origin Energy in a deal worth $10.21bn.

The terms of the deal will value Origin at an enterprise value of $18.7bn. The purchase price of $8.91 per share represents a 53.4 percent premium to the company’s unaffected share price.

Upon closing of the transaction, Brookfield, its institutional partners and investors will own Origin’s energy markets business, Australia’s largest integrated power generator and energy retailer. MidOcean will separately own Origin’s integrated gas business including its upstream gas interests and a 27.5 percent stake in Australia Pacific LNG (APLNG). MidOcean has entered into an agreement to on-sell a 2.49 percent interest in APLNG to ConocoPhillips. ConocoPhillips, already a 47.5 percent owner in APLNG, is the current downstream operator and intends to take over upstream operatorship of APLNG.

The deal is subject to approval from Origin’s shareholders, regulatory approvals and an independent expert’s report into whether the offer is in best interest of the shareholders, among others.

“The Board is unanimous in its view that this transaction is in the best interests of shareholders,” said Scott Perkins, chairman of Origin. “The transaction represents a significant premium to the share price prior to the original indicative proposal, and reflects the strategic nature of Origin’s platform, its growth prospects and anticipated earnings recovery. We believe the Consortium will be responsible owners of Origin’s businesses. Our discussions with the Consortium confirm a high degree of alignment with Origin’s strategy and a desire to accelerate initiatives consistent with Origin’s critical role in Australia’s energy transition. This alignment validates the vision and hard work of Origin’s management team and employees.”

“The significant premium placed on Origin by the Consortium reflects the value of our strategy and our advantaged position to capture value from the energy transition,” said Frank Calabria, chief executive of Origin. “We believe this transaction is a great outcome not only for our shareholders, but for all stakeholders including our customers, employees and partners. We believe this transaction also stands to benefit the broader Australian community as it will unlock significant capital that can help accelerate the energy transition and deliver benefits in the form of cleaner, smarter and lower cost energy for our nation over time.”

“As the energy transition gathers pace, what’s needed is increasingly clear: faster deployment of large-scale renewables, the accelerated, responsible retirement of coal generation, and an interim, supportive role for gas as the dependable back-up fuel,” said Mark Carney, chair of Brookfield Asset Management and head of transition investing. “Brookfield is determined that the new Origin Energy Markets will lead the way in all respects at this critical moment for the Australian economy.”

“LNG will be critical in delivering energy transition targets, and this transaction is a compelling opportunity to accelerate EIG’s strategy of gaining exposure to high quality LNG assets around the globe,” said Blair Thomas, chief executive of EIG. “We have long been attracted to the Australian market, with an established presence in Australia since 2000, and look forward to playing a pivotal role in meeting Australia’s transition targets by enabling broader decarbonization efforts at APLNG.”

News: Origin Energy agrees $10.2 bln takeover deal with Brookfield consortium

Mountain Express files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Mountain Express Oil Company and certain other affiliated companies have filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas.

According to the company’s court filing, Mountain Express’ retail network will continue normal operations. The company will use cash collateral to fund and protect its operations if the court rules in its favour, alongside normalising operating cash flows to reach “value-maximising”.

Mountain Express has also confirmed in a press release, that it was in advanced discussions with its secured lenders regarding a commitment of debtor-in-possession financing, which will provide additional liquidity to the company and assure its ability to meet its post-petition obligations in the ordinary course of business. Mountain Express will continue discussions with its financial stakeholders, including critical conversations with its landlords and other key constituents to maximise value for all stakeholders.

“Through this process, Mountain Express will continue to transform the business for the future while bolstering our financial position,” said Turjo Wadud, chief executive of Mountain Express. “I am confident in the strength of our business and our team and look forward to achieving a comprehensive resolution that will best position Mountain Express for long-term success. We continue to have a robust pipeline and will continue to provide opportunities for our dealers, partners, and employees. During this process, we intend to maintain the underlying durability of our business as well as our strong relationships in the industry.”

Mountain Express, which was founded in 2000, currently operates a network consisting of 828 fuelling sites and 27 travel centres throughout 27 states in the US. Its associations include partnerships with major firms such as ExxonMobil, BP, Shell, Chevron, Texaco and Sunoco. The company also has a dealer joint venture with Pilot Co., Knoxville, Tennessee Since 2013, Mountain Express has distributed more than 1.1 billion gallons of fuel, it said.

In 2021, Mountain Express completed a $205m debt financing, which the company said it will use to refinance its existing credit facilities and to support its growth objectives. Later in the year it acquired Brothers Food Mart in New Orleans, which had 50 locations. It also acquired 24 retail locations and the wholesale fuel assets of Texon Oil Inc. in Medford, New Jersey. And in 2022, Mountain Express purchased the 26-unit The Store brand of convenience stores from Team Schierl Cos.

News: Mountain Express Oil to Restructure Following Chapter 11 Filing