Erickson launches $30 million rights offering for shares, term loans

By Caroline Salls

Pittsburgh, Feb. 24 – Erickson Inc. launched a $30 million rights offering on Feb. 15 in connection with the second amended plan of reorganization, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The rights are being offered to eligible holders of the company’s 8¼% second-priority senior secured notes due 2020.

Erickson said the first $20 million of the rights offering shares will be purchased at a price with an implied 10% discount to the plan equity value.

Any amount in excess of $20 million up to the total $30 million rights offering amount will call for the purchase of a combination of new common stock at the same discount and term loans to be issued under a new second-lien credit facility at par.

On Feb. 9, Erickson entered into a backstop agreement under which investors will participate in the rights offering and backstop the full amount.

In exchange for the commitments under the backstop agreement, the company will pay to the investors a premium equal to 6% of the rights offering amount.

The investors include Wayzata Investment Partners LLC, MHR Institutional Partners IV LP, Merrill Lynch, Pierce, Fenner & Smith Inc., Armory Credit Opportunity Fund LP, Wolverine Flagship Fund Trading Ltd., Foxhill Opportunity Fund, LP, Corbin Opportunity Fund and MO Credit, LLC.

Erickson, an aircraft manufacturer based in Portland, Ore, filed bankruptcy on Nov. 8 in the U.S. Bankruptcy Court for the Northern District of Texas. The Chapter 11 case number is 16-34393.

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