Chapman Energy INc said it is launchinga major restructuring which, if not approved, it will have no
alternative but to seek protection under Chapter 11.
    Under the plan, Chapman will exchange securities and cash
for all outstanding 12 pct senior subordinated debentures due
2000 and will sell a controlling interest to Troon Partners
Ltd.
   The agreement with Troon requires Troon to advance 6.5 mln
dlrs partially secured by a first mortgage lien on the
company's interest in its natural gas pipeline partnership and
Troon to tender 100,000 principal amount of debentures to
Chapman.
    Proceeds of the loan will be used for the cash portion of
the restructuring. Troon will acquire a majority stock interest
and control of the board.
    In addition, Chapman and Troon will establish a 10 mln dlrs
acquisition joint ventures, it said.
    The plan also contemplates establishing a restructured loan
providing for one master credit agreement having an aggregate
balance of 22.4 mln dlrs.
    The plan also contemplates the recapitalization of
preferred stock whereby each share will be converted into three
shares of common stock.
    Chapman also said it also plans to negotiate settelment and
discharge of a substantial portion of its accounts payable and
settlement of certain litigation.
    If approved by various creditors and shareholders, the
company expects the plan to be completed by May 29.
    Chapman also repoted a loss of 43.4 mln dlrs for the year,
including asset writedowns of 35.5 mln dlrs, compared to
December 31, compared to a net income of 177,243 in 1985.
    The 1986 loss resulted in shareholders' deficiency of 15
mln dlrs compared to shareholder's equity of 28.9 mln last
year.
    Total assets decreased to 35.6 mln dlrs from 81.8 mln dlrs.
 Reuter
