Blackstone Group to Invest Over $10 Billion in Energy Companies

Bloomberg Television — Blackstone Group is looking at about 80 energy companies that are struggling as the price of oil has fallen, said Tim Coleman, the unit’s head. The firm is looking to invest over $10 billion in energy companies, President Tony James said in January.

“You can’t have your price drop 50 percent and not have issues,” Coleman said in an interview Thursday with Bloomberg Television’s Erik Schatzker and Stephanie Ruhle. “We’re probably looking at 80 names that are, in some form or another, struggling. We have a lot of new assignments, both on the debtor side and on the creditor side.”

Blackstone, the world’s biggest alternative-asset manager, has sought to take advantage of the decline in several of its businesses, with its credit group lending to burdened energy producers, its private equity division evaluating buyout opportunities and its restructuring unit taking on new mandates.

“We have a lot of new assignments,” Coleman, 60, said, declining to say how many.

Samson Resources Co., the energy producer owned by KKR & Co., hired Blackstone and law firm Kirkland & Ellis LLP last month to review its financial structure. Samson’s $2.25 billion of bonds maturing in February 2020 have dropped 70 cents since the start of September to 32.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Energy producers struggling the most are those with market value from about $1 billion to $1.5 billion, Coleman said. Blackstone is helping some of the companies carry out exchange offers by buying their own debt, a “gutsy” move, he said, because it uses up some of the companies’ free cash to bet on a rebound in their bonds.

Blackstone, in an effort to reduce conflicts of interest with its investing businesses, is in the process of merging its restructuring and merger advisory groups with a firm led by former Morgan Stanley banker Paul Taubman. The new company, which will be publicly traded, is named PJT Partners Inc., according to a regulatory filing Wednesday. Coleman said the spinoff is expected to be completed this year.

Leave a Reply

Your email address will not be published. Required fields are marked *