U.S. Concrete emerges from bankruptcy with $75 million revolver

By Caroline Salls

Pittsburgh, Aug. 31 - U.S. Concrete, Inc. has met the requirements of its plan of reorganization and emerged from Chapter 11 bankruptcy, according to a company news release.

The company said the emergence comes just four months after it filed the case to reorganize its balance sheet.

"We are very pleased to have concluded this comprehensive financial restructuring that significantly reduced the total debt on our balance sheet and left the company in very solid financial condition," president and chief executive officer Michael W. Harlan said in the release.

Exit financing

U.S. Concrete has entered into a $75 million four-year revolving secured credit facility from a group of banks led by JPMorgan Chase and issued $55 million of 9.5% convertible secured notes due 2015.

As previously reported, pricing on the revolver is Libor plus 375 basis points with a 75 bps commitment fee.

Before the delivery of financial statements for the fiscal quarter ended Sept. 30, 2011, there will be an availability reserve of $15 million, and after such date, unless the fixed charge coverage ratio for any trailing 12-month period is greater than or equal to 1.00:1.00, there will be an availability reserve of $15 million, to be increased monthly by $1 million, up to a maximum of $20 million.

Proceeds will be used to fund operating expenses, working capital and other general corporate purposes and to repay the company's debtor-in-possession financing facility.

"The new credit facility provides us with adequate liquidity to fund our working capital needs and capital expenditure program as we move forward," Harlan said in the release.

"Our improved capital structure and financial condition should provide reassurance to our customers, suppliers and employees about the stability of the company and our commitment to our operating strategy."

With its emergence, the company converted $272.6 million principal amount of 8 3/8% senior subordinated notes due 2014 into equity of the reorganized company.

Warrants to purchase up to 15% of equity of the reorganized company will be issued to holders of the old common stock in the upcoming weeks, and shares of the reorganized company will trade over the counter.

Creditor treatment

Treatment of creditors will include:

• Holders of the company's 8 3/8% senior subordinated notes due 2014 will exchange their notes for the equity in the reorganized company;

• Existing shareholders will receive seven-year warrants to acquire 15% of the equity of the reorganized company;

• The company's DIP facility will be paid in full in cash;

• General unsecured claims will either be paid in full in cash, be paid in the ordinary course of business or be left otherwise rendered unimpaired; and

• Holders of intercompany interests and intercompany claims will receive no distributions.

U.S. Concrete, a Houston-based cement manufacturer, filed for bankruptcy on April 29 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 10-11407.

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