Nine Energy Service Pursues Strategic Chapter 11 Restructuring to Eliminate $320 Million Senior Debt

Nine Energy Service, Inc. (NINE), a major player in oilfield solutions, has filed a prepackaged Chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the Southern District of Texas. The restructuring initiative represents a decisive move to address the company’s debt burden by eliminating approximately $320 million in senior secured notes, which currently drain about $40 million annually from operational budgets in interest payments alone.

Aggressive Debt Reduction and Interest Expense Relief

The prepackaged Chapter 11 strategy allows Nine Energy to streamline its restructuring process by obtaining stakeholder approval of its reorganization plan before formally filing bankruptcy petitions. This approach compresses the typical bankruptcy timeline significantly. By slashing the $320 million debt load, the company will unlock immediate annual interest savings of around $40 million—funds that can be redirected toward operational improvements and growth initiatives rather than servicing obligations to creditors.

Financing Framework Supports Uninterrupted Operations

The company has secured dual-track financing commitments from its existing ABL (Asset-Based Lending) lender to ensure business continuity throughout the restructuring period. A $125 million debtor-in-possession (DIP) financing facility will sustain operations during the Chapter 11 process. Upon successful emergence, Nine Energy will transition to a $135 million exit ABL facility, positioning the company with a refreshed capital structure and improved financial flexibility for post-bankruptcy operations.

Rapid 45-Day Emergence Pathway

Nine Energy management has positioned the restructuring to move with remarkable speed. The company expects to complete the Chapter 11 process and emerge from bankruptcy protection within 45 days—a compressed timeline that reflects the efficiency of prepackaged bankruptcy procedures. This swift resolution minimizes market uncertainty and operational disruption. It’s worth noting that the restructuring specifically excludes Nine Energy’s international operations in jurisdictions outside the U.S. and Canada, which will continue operating outside the bankruptcy filing.

The strategic use of prepackaged bankruptcy demonstrates how companies can leverage structured insolvency procedures to achieve rapid financial reset while maintaining operational momentum.